Factors involved in fraud cases with external Auditors - Essay Example

As financial statements represent the functioning of the management, it is essential to maintain authenticity and reliability for avoiding fraudulent actions, while preparing such reports. The auditors express their views associated with the maintenance of authenticity and transparency by the management. They have been given the authority to assess these financial statements of organizations in order to judge the transparency of such information. They gather evidences in order to assure that the figures appearing in financial statements do not include material misstatement. The credibility of such reports is incremented by means of the audit process carried out by the auditors. These reports audited by auditors have huge impact on the decisions of investors, bankers, creditors and other stakeholders. The economy is struggling hard for recovering from a tumultuous situation which is infested with severe corporate scandals associated with misconduct of the auditors which have resulted in losing investor’s confidence. Presently, greater emphasis is given on improving the credibility, accountability, transparency and trust associated with the information provided in financial statements (Romero, 2010). The present structure involved in the audit process seems to be very problematic. ...