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Examples Of External Auditor

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I am interested in a position, preferably as an external auditor, to contribute my humble accounting and finance knowledge in your accounting firm. As this job position also consists of consultation roles, such as financial consultation, preparation of financial accounts, business advice and taxation purpose to enhance the allocation of resources and generate revenue for the small and medium-sized enterprises (SMEs). I have learned two key theories from the course Accounting Theory and Analysis 308 in my undergraduate education that will help me in taking up this job position, they are: (1) International Accounting, and (2) Earnings Management.

Firstly, the importance of external auditor to be well-equipped with the knowledge of international …show more content…

The standardisation of accounting standards in different countries using IAS can be one effective solution to reduce the barriers of business tradings between countries. For example, the management of Haigh’s Chocolates can understand and compare the annual reports of Hershey Company, Singapore with Cadbuy, Malaysia that comply with IAS though there is a difference in the cultural values, currency, and legal and taxation systems in the countries before making business …show more content…

al. 2012, 257). Earnings management theory can help the firms manage their financial performances. For instance, the earnings information in financial reports act as an input to the debt covenants to decide on providing loans to the firms, and it can reflects the creditors’ risk if the firm has cash flow problems stated in the report.

Firms that present fictitious earnings information in reality which known as ‘black earnings management’, while ‘white earnings management’ is when company give true and fair view of its financial report to the public where high transparency has implemented in the organisation (Rankin et. al. 2012, 258). ‘Grey earnings management’ is when the annual report having biased information that could benefits the organisation, but still not consider as fraudulent (Rankin et. al. 2012, 258).

Earnings management can be good practice if applied in a responsible manner such as complying to the strategic choices that had been implemented in the accounting standards (Rankin et. al. 2012, 262). Unfortunately, more often management of firms could alter the accounting practices to present a desired outcome such as using the accrual methods to accelerate or detain recognition of the firm’s expenses and income (Rankin et. al. 2012,

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