StudentShare solutions
Triangle menu
  • Home
  • Subjects
  • Finance & Accounting
  • Auditing. The series of scandals caused a general crisis of confidence in the integrity of the entire system of corporate accoun

Auditing. The series of scandals caused a general crisis of confidence in the integrity of the entire system of corporate accoun - Essay Example

Not dowloaded yet

Extract of sample
Auditing. The series of scandals caused a general crisis of confidence in the integrity of the entire system of corporate accoun

Thereafter the author described financial scandals as those corporate scandals that involve misappropriation and misuse of money or economic resources. The chronicles of business history are filled with errors related to accounting, judgements, financial management and financial skulduggery. Over the last few decades unscrupulous entrepreneurs have been heavily involved in financial scandals where they allegedly diverted funds from one stated use to another, paid dividends out of borrowed money or capital, traded stocks on the basis of insider information as well as concealed vital information regarding those stocks, practiced creative account thereby altering the company’s records so on and so forth. Auditing failure has been a major concern over the last two decades with case of Enron and WorldCom coming into the limelight. According to Tackett, Wolf and Claypool (2004), a severe distortion in the financial statements that has not been reported in the audit report can be termed as audit failure. Thus the auditor has committed a serious mistake while conducting the auditing process (Arens, 2002). Normally, auditing failure would not happen if an auditor is abide by the Generally Accepted Auditing Standards despite the fact whether the financial statement is accurate or fair. ...
Thirdly, auditing failure occurs when the auditor is lured into committing such frauds by the company. Lastly, auditing failure might occur if the audit officer may commit fraud intentionally because of having some private relationship with the client beyond a certain level which is normally not expected in normal audit between independent parties. The following sections will highlight the integrity in the System of Corporate Accountability thereby commenting on the role of auditors and their effectiveness in the auditing process. The issues which undermine the credibility of audit reports will also be discussed. Thereafter, the changes that have been made in the auditing regulation will be explained followed by an explanation of the corporate governance framework that exists in Parmalat. Henceforth, the issues of audit reporting will be discussed and appropriate conclusions will be drawn. Integrity in the System of Corporate Accountability Corporate accountability is of utmost importance in debates around social issues, ethics and businesses (Brenkert, 2004). Accountability generally refers to the reliability and authenticity in the financial accounts reporting related to the financial status of any corporation. Integrity in the corporate accountability system should be maintained in order to reduce fraudulent activity within the financial reporting system. In the latter half of the twentieth century, the social and environmental issues were also brought under the financial accountability making them responsible for the environmental and social records. Linkage between the accountability and the integration of the Corporate Social Responsibility within the businesses helped to take the Business for Social responsibility to greater heights. It ...Show more

Summary

Increasing the Effectiveness in Auditing Process Introduction Enron’s failure in 2001 and other corporate scandals that came into the limelight in 2002 and henceforth have diminished the confidence, that people had all over the world, in financial reporting, auditing and other corporate governance practices (Ivaschenko, 2004)…
Author : geraldgorczany
Auditing. The series of scandals caused a general crisis of confidence in the integrity of the entire system of corporate accoun essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Auditing. The series of scandals caused a general crisis of confidence in the integrity of the entire system of corporate accoun"
with a personal 20% discount.
Grab the best paper

Related Essays

The Regulatory Response to the Corporate Scandals in the USA and the EU was Diametrically Different
Usually, before investors decide to invest their money in any investment company, they seek to ensure that the financial situation of the company is secure and reliable.1 Also, they need to have confidence that the company will be properly managed and controlled in order to be profitable.
17 pages (4250 words) Essay
Auditing. PARMALAT COMPANY. The series of scandals caused a general crisis of confidence in the integrity of the entire system o
Parmalat had changed its external auditor from Grant Thornton to Deloitte Touche in 1999. However, the Italian law states that changes within the audit firms has to occur only in a gap of every nine years and the previous auditor can only be consulted for auditing concerns related to the firm (Stoltenberg, Dey and Lys, 2008).
8 pages (2000 words) Essay
Was the financial crisis of 2007-8 caused by failures inherent within capitalism or the changing global system
Even as the economic crisis became the most serious to face the capitalist countries, since 1929, it had far reaching consequences in the social lives of many people who lost employment while many others who were qualified failed to get job opportunities.
9 pages (2250 words) Essay
Recent incidences of corporate or banking scandals
Conclusion Personal opinion The government should intervene and dictate the relationship that the politicians should have when it comes to controlling of public corporations. This also goes for the privately run corporations since politicians have a tendency of poking their noses where it is not necessary.
3 pages (750 words) Essay
Confidence
G. 2004, pp 38). The most common way of examining the human personality is by use of the trait theory; it can be described as a way of measuring traits of individuals. Gordon Allport, who was psychologist did a research about traits and came up with certain classifications of traits.
5 pages (1250 words) Essay
Information System Auditing and Financial Auditing
According to Hall (2004), "financial auditing is a form of independent attestation (or verification) performed by an expert who expresses an opinion about the fairness of a company's financial statements" (p.17-2). On the other hand, he defined "IT (Information Technology) auditing refers to the part of an audit that involves the computerized elements of an accounting information system" (p.17-3).
1 pages (250 words) Essay
Scandals
Here we will be discussing one such scandal which rocked the world in October, 2001 – The Enron Scandal. The company was established in the year 1985 and quickly rose to become one of the major organizations. It became a very famous company and reigned all through the
2 pages (500 words) Essay
Integrity
Promises and agreements are bound by law failure to which compensation is never an option. This begs the questions; does self discipline apply to individuals in the modern society? Does integrity
2 pages (500 words) Essay
Corporate Integrity Management
Most significant is that an organization needs to have fundamentals that drive it, allowing it to stand the test of time as it moves towards its future, with one original aspect; core
6 pages (1500 words) Essay
Assignment Information System Auditing
types: control tests-determine the accuracy of the internal controls and substantive tests-determine the fairness of the data in reflection to financial affairs of the organization (Alderson, 1993). Basically, this paper will provide guidelines or explanations on the importance
6 pages (1500 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation