Being prepared by either internal or external auditors, audit report gives the evaluation of the performance of a company. The reports are not only essential to the management but also they are heavily relied upon by other parties including the shareholders, government, financial institutions and the general public. It is important to note that auditors only give an opinion as to whether or not the financial statements depict the correct financial position of a company. This paper seeks to discuss whether the current international regulatory environment for the auditing is effective in ensuring that investors and owners are provided with reliable information by external auditors. Public interest in relation to the (accounting and) audit profession According to the International Federation of Accountants (IFAC) public interest entails the entity or individuals who are directly affected by the financial reports that are given by auditors or by the accountants. One of the major objectives that accountancy profession must strive to achieve is to safeguard the interest of the public. This includes provision of accurate and reliable financial information that is vital in making investment decision. ...
essential to note that by ensuring uniformity in the financial statements of various companies, members of the public are in a position to determine the profitable and the well managed organizations. One of the major aspects of accountancy as depicted by Gonzalo (2009) is that in order to attain an efficient economy, it is vital for the financial accounts to be accurate and comparable. In this way, companies can access the risks that may negatively affect the public investments. He also stipulates that proper financial reporting results into efficient economic outcomes and common good while poor reporting adversely affect the performance of an economy. To create public confidence especially in the financial market, it is prudent for companies to provide adequate information that eliminates uncertainty which demotivates individuals to engage in transactions. Provision of independent certification which is the major role of auditors significantly creates confidence among the investors particularly in the current world of asymmetric information (Gonzalo 2009). In the same way, certainty is a key aspect that motivates individual to engage in purchasing of company products. In this regard, auditors should play an imperative role of public certification in order to increase public confidence and reduce uncertainty thus lowering the prices of the commodities. This will not only result to financial stability but also it generates social benefits to the individuals. One of the notable implications of proper auditing and professional accountancy is that they ensure comparability and verifiability of the financial information thus propagating public interest since they result to efficiency of markets. In order to ensure advancement of public interest, it is vital for auditors and
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Running head: AUDITING AND THE PUBLIC INTEREST Auditing and the public interest ASB 3214: Auditing Insert Name Insert student number Insert 30th November 2011 Word count 2035 Introduction The availability of opportunities to diversify the investment portfolio for organizations depends on the reliability of the financial information and the availability of adequate financial resources…
nsion planner).4 Summary The fixed interest investment funds offered to the public by Admiral Asset Management (the issuer) to investors are low risk mutual funds in the form of bonds. The fixed interest investment fund is a debt security intended to raise funds in accordance with the Financial Services and Markets Act 2000.5 A copy of this Prospectus has been filed and registered with the Financial Services Authority under the laws of England and Wales.
In the process, it is their duty to detect fraud or error. However, the auditor can fail to detect any errors or fraud due to Audit risk. Audit risk is the risk which occurs when an auditor expresses inappropriate audit opinion due to material misstatements (Kumar and Sharma 2006).
The author states that public accountants, like other professionals, historically worked in professional partnerships or sole proprietorships. For many years professional accounting associations effectively controlled the form of Auditor organizations through explicit, formal restrictions.
We will conduct our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
On the other hand, fraudulent financial statements include figures that were intentionally inserted by one or more company employees, possibly conniving with the external auditors. The research delves on the five areas of heightened audit risk. Auditing must
ting irregularities mentioned above begins with the approach that Cardillo Travel System took to when recognizing $ 203,000 payment made by the United Airlines to help Cardillo Travel System cover some expenses incurred while shifting from American Airlines’ Sabre computer
The documents are usually prepared to verify whether the working results for a particular period. Auditors are supposed to show as precise financial situation of the businesses. A balance sheet is supposed to give a true reflection of
In a bid to ensure conformity and uniformity, bodies such as the International Financial and Reporting Standards prepared rules and regulations that should be followed when preparing the financial statements (Foster & Greenawalt 1995, pp.
6 pages (1500 words)Assignment
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