This was one of the prime reasons which had brought the scandal under limelight. In the year 2003, Parmalat was severely penalized for trying to raise 300 million in the form of bonds (Word Socialist, 2004). The author of the study will highlight the impact of the integrity in the system of corporate accountability process, role of the auditors with respect to Parmalat scandal. The study will also highlight the importance of corporate governance mechanism related to Parmalat. The credibility of the audit reporting, functions and regulations will also be discussed with respect to the auditing procedure carried out by Deloitte & Touche in Parmalat. Finally, the study will conclude highlighting the changes in the critical evaluation of changes in auditing, corporate governance regulations in prevention of scandals. Integrity in the System of Corporate Accountability The corporate accounting system encompasses the traditional accounting and also the social reporting method. The social reporting concepts are supposed to revolve around environmental and also the social aspects of the assets and liabilities reporting methods. It is concerned with the benefits and cost associated with the issues and the verification, assurance provided by the auditors (Rao, Tilt and Lester, 2012). It encompasses various issues which revolve around the interactions and the inclusion of elements like ethics, corporate governance, social and environmental accounting, philanthropy activities (Pollock, 2011). The development of social corporate accounting encompasses the formulation of accounting systems as per the guidelines provided by the Global Reporting Initiative (GRI) to provide accuracy in the global and environmental accounting. Role of Auditors The role of internal auditors of the company identifies the errors and checks whether the measures undertaken by the management are in compliance with the norms and regulations. The duty of internal auditor is to check of the transparency of accounting system and also provide advice based on the conducted auditing function (National Fraud Authority, n.d). One of the prime objectives of the auditor is to provide the stakeholders and shareholders the key assurance that risk management activities are carried out effectively. The auditor’s incompetence will be observed when he/she would be able to uncover the misappropriations in the accounting systems and also the preparation of the timely accounting reports, risk management system and various other activities. They evaluate the accounting activities and provide certain reasonable assurance that enables the accomplishment of goals and objectives of the organization (Ferrarini and Giudici, 2005). Accurate and transparent auditing function can also necessitate the entire financial system and help in the removal of accounting discrepancies within the systems (Caraballo, Cheerla and Jafari, 2010). The management of the company is unaware that inaccurate auditing procedure leads to the complexities within the accounting system of the organization (George, 2011). In the context of Parmalat, the internal auditors were not only able to perform accurate auditing, detection of error on the methods of the system but also had involved itself in the creation of the forgery of accounts (Action Fraud, 2013).This was one of the prime reasons which had
Analysis of Parmalat Scandal Introduction The failures to identify the reporting on the misleading of financial information have undermined the economic value of audit (CGR, 2013). The significant changes in the internal auditing functional procedure after the Enron and WorldCom disasters was due to peer pressure by media and the focus of the legislative functions (NAB, 2011)…
Various driving factors and inherent benefits for different companies are proving to be incentives for the organisations towards enhanced financial globalisation. The growing interdependence of developed economies on developing and emerging economies is contributing towards increased globalisation (Hamilton & Quinlan, 2008, p.iv).
According to Mingus (2007), a scandal can be described as a widely publicized incident that accuses a company of wrong – doings, disgrace and moral outrage. Research scholars such as (Sivakumar, 2011), corporate scandals are reported when officials of a particular organization is accused of behaving unethically on behalf of his corporation.
It is also used by the investors in their decision making process, related to purchase or sell of the securities. The auditors guide the investors and owners in their decision making process. The effective utilization of financial statements requires understanding of the functions of auditors as well.
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.
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.
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).
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
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
Besides, the essay will focus on the gallery and museum architect and how it impacted on the visitors’ experience. The essay will analyze an example of an art project realized in the Turbine Hall. Moreover, it will analyze the
12 pages (3000 words)Essay
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