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Finance - Assurance and Audit - Essay Example
Finance & Accounting
Pages 5 (1255 words)
Assurance and Audit Instructor Assurance and Audit Introduction Shareholders have over the years lost large amounts of money thanks to unethical management behavior, which leads to multiple business collapses, especially in savings and the loaning industry…
Internal audit function Fight (2002, p. 27) asserts that internal auditing serves the basic purpose of protecting the shareholders. Its role revolves around operational efficacy, financial reporting reliability, investigation and deterrence of fraud, asset safeguarding as well as ensuring compliance with the laws and regulations. Technically, internal auditors have a vital role in protection of the firm assets and their entire activities sum up to asset protection, which is also protection of the shareholders. According to Vinten (2004, p. 13), prevention of fraud revolves around monitoring of the financial procedures, including records and asset verification. Managers and other stakeholders commonly misappropriate these areas. A shareholder is an individual, an institution or a corporate with shares in a firm and has rights to the firm assets in case of liquidation. In essence, they own the company stock and have the right to protection from fraud and misappropriation. Internal auditors have to protect the shareholders from financial loss resulting from fraudulent activities, obliteration of vital financial records, and concession of valuable, confidential information to unauthorized people, disruptive loss of business opportunities, unauthorized use of firm resources and confidence and customer relationship loss. ...
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