Unit 2 Accounting Essay Assignment Help
In addition, Company Accounting / Financial Management, these people are essentially deal with the finances of organization and, for them, through an audit are essentially a question of trust and tranquility. Having an independent expert led their numbers can be a bit uncomfortable at times, but the reward is to ensure that the numbers are true and righteous. These systems are generally established by the specific design of computer systems and, for example, to ensure that the authorization of transactions is controlled by the rules and clear policies. Finally, for many accountants and CFOs also enjoy working closely with auditors, thinking that might help solve complex accounting, advice on questions ranging from management processes issues of world class and follow the latest techniques, rules and regulations. Financial analysts, these people assist to determine what actions and organization are of worth and therefore its value as a whole. They do this through independent analysis and comment on its financial position both to make predictions concerning future success. For financial analysts, audited accounts are an essential tool because they provide objective information system and to support its work independently checked. Also Regulators, these independent bodies are responsible for overseeing the wide range of industries to make sure that individual companies operate fairly and legally. They can use the audited accounts in the context of the continuous monitoring of each company or to facilitate more specific surveys.
The localization and error correction is possible through an audit. The discovery of the fraud is possible through audit. The authors can be held responsible. The audited accounts reveal fair presentation. Lenders ready accept the accounts of the auditors. The reputation of borrowers increased because of the audit. And audited accounts enables employer to extend their activities. People can refer to the Auditors. The auditors are professionals and know their job very well. You can put higher consideration to the gray area. There exists a moral check on management and other staff. Audit puts pressure on staff that has to work honestly. When there does not exists remaining work is therefore less chance of errors and fraud. This management can play a dynamic role in the development and implementation of policies.
The auditor can highlight the weakness of the system of internal control. The management of the company can take action to eliminate these weaknesses. Effective control systems are essential for large companies. The audit is useful for employees. They have interests in profits. Audited accounts demonstrate real and fair profits. Employees can request a salary increment, employee benefits and profit sharing. The audit is useful for inventors. Audited accounts can be used to calculate the value of shares and other securities.
However, some of the limitations of the statutory audit include; the audit is subjective rather than objective because auditors give an opinion on accounts. Limitations of the accounting system and internal control (e.g. errors, fraud, etc) Users cannot understand every word used in the audit reports. Audit does not ensure the future viability of the verified organization. It also does not ensure the effectiveness, improvement and efficiency of management. Finally, auditors give that reasonable assurance whether the financial statements are free from material misstatement suppose to a factual statement.
Conclusion: After a detailed analysis of the auditing including the duties and objectives of an auditor, legal and professional requirement of an auditor, importance of an audit, legal requirements of an audit and finally the advantages and limitations it can be concluded that the auditor has a legal and a professional requirement to report independently on the financial statements prepared by the management and to comply with other regulatory requirements. Talking about the importance of the audit it could be finalized that the auditing field has a significance importance in each and every organization. It enables the management and Board of director’s to have a proper image of the company’s operations and performance for the financial year. Moreover, there a number of advantages which an organization can avail through the audit of the financial statements and implementing the audit findings as notified by the auditor. Finally there are certain limitations of an audit which management has to face in the course of audit. But the advantages of an audit are more enough than the limitations of the audit. Therefore the audit involves a less and immaterial opportunity cost.
Auditor’s role is one of the important roles played in the corporate world presently majorly due to the legal and professional requirements that define and outline the respective role and signify the importance of an audit. In spite of the limitations of the audit, benefits derived from it outweighs and outshines the limitations rendering the audit effective and efficient way to ensure fairness and truthfulness of management representation.
Accounting-simplified.com,. ‘Purpose & Objective Of Auditing Financial Statements’. N.p., 2015. Web. 22 Mar. 2015.
Competence Requirements For Audit Professionals. 1st ed. International Federation of Accountants, 2005. Web. 22 Mar. 2015. Order Now