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Auditing Table of Contents Question 2 3 Question 3 4 Question 4 6 Question 5 7 Question 7 8 Works Cited 11 Question 2 “The tone at the top” is the term used to denote most significant component for encouraging trustworthiness in organization as well as truthfulness in financial controls.
Due to reluctance of tone of Societe Generale, the company had to face a loss of almost $7.2 billion in 2008. It is in this context that Societe Generale provided higher concentration on the front office activities and there was less consideration towards back office performances. As a consequence, there was imbalance between the control of front office and back office functions (Beasley, M. S. & Et. Al., “How a Low Risk Trading Caused a $7.2 billion Loss”). Due to this reason, Societe Generale was incompetent to develop acute inspections essential for controlling the roles and responsibilities of employees. From the case study, it can be observed that like other organizations, Societe Generale had also become quite determined about drumming up its market worth. Thus, it did not provide much attention towards the traders and its responsibilities for managing the risks, while it rendered high significance for financial organizations in order to maintain profitability (Wartzman, “Executives Are Wrong to Devalue Values”). According to Canadian Auditing Standard (CAS), ‘Tone at the Top’ outlines the principles of a business unit and administration’s obligation to aptitude and beliefs (Hartley, “Tips for Cost-Effective CAS Application”). Tone at the top is necessary for better financial control in any organization. ...
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