auditing - Essay Example

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auditing

As the financial statements are the representation of management, it becomes very important to maintain the reliability and authenticity of these statements in order to avoid fraudulent activities in their preparation. The auditors have the responsibility of expressing their views related to the maintenance of fairness by the management. They are authorized with the responsibility of assessing the financial statements for testing the fairness and transparency of the information available in those statements. They collect evidences for assuring the fact that figures which are mentioned in the information does not involve material misstatement. The credibility of the financial statements is increased through the audit process conducted by the auditors. The report provided by the auditors has high influence on the decision making of bankers, creditors, investors or other stakeholders. Issues affecting the credibility of auditors and increasing the need of their rotation The present economy is struggling to recover from the turbulent period that is filled with various corporate scandals and also lacks investor confidence. Nowadays, greater emphasis is laid on the improvement of transparency, credibility, accountability and trust related to the information available in the financial statements. ...Show more

Summary

Does the rotation of auditors improve the quality of auditing? Introduction The auditors play an important role in the decision making purposes. They have the responsibility of assessing the authenticity of the financial statements. The financial statements are used by the owners of the organizations for evaluating the management stewardship (Okpala, 2012)…
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