1. Auditing can be defined as carrying out a formal financial investigation or examination of a firm and its financial statements. During the process of auditing the auditors will go through all of the company’s books and financial statements. He will analyze research and go through all the relevant financial records to ensure that they are accurate and whether taxes are being paid properly.
2. There are various benefits of the auditing process. The benefits of an audit include analyzing and understanding company’s financial records. This in turn helps provide a better and clearer picture of the company’s financial information to its various users. These could be internal as well as external users. Some of these users include shareholder, …show more content…
Usually it is the management that has more information about the firm. This can lead to an imbalance as the management is in a greater position to manipulate or take advantage of the situation and perhaps not in the firms best interest.
Self-interest of the managers, this is often times one of the most common problems arising from principal-agent relationship. Some examples include using firms resources for personal benefit, avoiding positions of high risk even if the outcome would be beneficial to the firm and thereby the owners.
Moral hazard where the agent acts in a manner that is inappropriate or inefficient, simply because of information asymmetries.
Opportunity Costs take place when the principle has imposed restrictions on decision making or restraints the scope of action of the agent. This can lead the agent to be unable to act in the best possible interest of the company. It also burbs creativity as he does not have much control.
Monitoring expenses are those that are incurred to monitor or rather control the agent’s activities. Auditing expenses is one such example. Remuneration, profit sharing, commissions …show more content…
some of them are listed as below.
Hostility or resistance from management- The employees see auditiors as highly authorized persons who will be investigate and scrutinize every aspect of their work. Hence this results in some amounts of hostility and resistance from the employees.The auditor needs to work with the employees as they provide them the various documents and evidence required. This negative perception of the auditors can hinder the relationsip between the employee and the auditor and hence affect the auditors work.
Limited Time – The auditors have very limited time in every organization to complete the auditing process. Moreover they have a lot to be done and very less time. They need to analyse all the financial statements of the firm within a very limited time span. This is a very tedious task and puts a lot of pressure on
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I 'm agree with Mayor Bloomberg, because he is doing an audit to find out about the slowdown of the guard at the prison in Rikers, as a result there are guards who block prisoners to testify against two guards that he was allegedly beaten. This should be penalized by the union, for the reason that, is illegal to block a person to testify and beat prisoners.
1. Describe the nature of the work and the working conditions. Bookkeeping, accounting, and auditing clerks work long hours to meet deadlines at the end of the fiscal year. This includes during tax time or when monthly or when yearly accounting audits are performed. These work conditions involve bookkeeping, accounting, and auditing clerks work in offices like many occupations involving a lot of paperwork.
Fair value became a significant topic during the financial crisis in the U.S. in 2008. People started penetrating for responses for the reason behind something so horrible that could happen and desired something to put responsibility on. For some, fair value accounting was to be responsible but like all debated topics, there were others on the other side of the topic disagreeing in favor of fair value accounting. Opponents of fair value accounting include the American Bankers Association (ABA), the Independent Community Bankers Association (ICBA), as well as Steve Forbes (editor-in-chief of business magazine Forbes as well as president and chief executive officer of its publisher, Forbes Inc.), Blackstop Group Chairman Stephen Schwarzman, Former
However, if the practitioner does this every day then it can be time consuming as practitioners will have to provide activities to meet the individual needs of the
Based on the study from University of Toronto, this list of benefits can help a lot to know what the do’s and don’ts are about financial literacy. It tells us to: Save money! Free up resources to do what you want. Be able to navigate, evaluate, and select from the hundreds of (confusing) investing, savings, credit, and consumer spending options that exist. Manage or avoid debt.
On the other hand, as a comeback, the CEO pressures the department to speed the implementation processes. Further, he also takes revenge from long term employee once they leave the company. One instance is that, CEO spread a bad reputation of an Associate Director to the prominent businesses such as Hayleys. Thus, hindering other people’s career progress. Affected stakeholder of political Behavior Stakeholders Target/Agent of Political Behavior Power Level in organization Description CEO Agent Very High He has a huge influence over the organization and ability to alter strategy COO Target High Ability to influence the decision of the CEO, but not completely Partners Target High Ignoring their 5-year succession plan for the department Associate Director Target Medium Often deny proposals from the director for department
An IT audit is the examination and evaluation of an organization's information technology infrastructure, policies and operations. Information technology audits determine whether IT controls protect corporate assets, ensure data integrity and are aligned with the business's overall goals. 1.2.2 Objectives IT audit objectives concentrate on substantiating that the internal controls exist and are functioning as expected to minimize business risk. These audit objectives include assuring compliance with legal and regulatory requirements, as well as the confidentiality, integrity, and availability.
“It is unfortunate that Ronnie Chan got tied up in the Enron situation, it is quite unfair to blame independent directors who have to depend on the external and internal auditors who are suppose to be giving independent and capable reports.” (Mark Mobius) The above quote lays the responsibility of the fall of a company on the auditors. The biggest audit fail of Enron Corporation not only led the company towards declaring bankruptcy but also dissolved one of the five big professional services companies, the Arthur Anderson.
Professional skepticism depends on the personal behavioral actions. The need for professional skepticism in an audit cannot be overemphasized. Professional skepticism is an essential part of the auditor 's skill and is very closely interrelated to the concept of auditor independences and professional judgement and contributes to audit quality. In addition to professional skepticism is important and required throughout the audit in engagement acceptances, identifying and assessing risks of material misstatement, designing the nature, timing and extent of further audit procedures that are responsive to assessed risks of material misstatement, and evaluating audit evidence, and forming an opinion on whether the financial statements are prepared, in all material respects, in accordance with the application financial reporting framework.