So these auditors verify the accuracy of their organization’s records and check for mismanagement, waste or fraud. Government accountants maintain and examine the records of government agencies, and audit private business and individuals whose activities are subject to government regulations or taxation. All ranks of government accounting sees that revenues are received and expenditures are made in accordance to laws and regulations. Many who have a background in accounting work for the federal government as Internal Revenue Service Agents. Within each field, accountants often concentrate on one aspect of accounting.
According to Marshall, McManus and Viele (2004), accounting is “the process of identification, measurement, communication of information about a business for the purpose of making decisions and informed judgment” (p.3). Decision makers look at balance sheets, income statements, changes in the owner’s equity and cash flow statement as documentation of the viability of an entity. Misrepresentation of the financial statements can place doubt of profitability in any company. The need for accountability and regulation of accounting practices is important in preserving trust in the business community. Entities have ethical and legal obligations in financial reporting.
So, there are similarity that we can see here when all companies in Bursa Malaysia are al... ... middle of paper ... ...eve efficient resource allocation. Failure to achieve appropriate and efficient corporate governance could result in sub-optimal allocation of resources, abuses and theft by management, expropriation of outside shareholders and creditors, financial distress and even bankruptcy. While evaluating the role of corporate governance, it is imperative to also consider the levels of development of market institutions and other legal infrastructure including laws and enforcement that provide good standard for investor protection as well as ownership structures. As conclusion, with the good legal and regulatory framework, it will bring more opportunity to the country with achieving the highest sustainable economic growth, maintaining financial stability, enhance transparency and accountability of corporate governance and also will contribute to the development of economy.
What is Audit? Types of audit. Audit is an examination or evaluation of a process of financial statements which are checked and defined for reliability and accuracy these documents. The audit provides the important accounts date about a conduct of the company not only for first-party audit’s benefit but also for outside agent (for customers, creditors, shareholders or another organization). Audit searches the issues of records, income statement, balance sheet and cash flow in order to determine the risks of business and moreover, helps to remove any slopes.
The risk assessment procedures to be performed are as follows: · Obtain an understanding of the Company, its environment, and its internal control over financial reporting. · Perform analytical procedures. · Inquire of the audit committee, management, and others in the Company about
One of the responsibilities of Audit Committee in corporate governance is to ensure the quality of the company’s financial reporting. By doing so, Audit Committee should review significant financial reporting issues and judgment so as to ensure the integrity of the financial statements of the company and any formal announcements relating to the company’s financial performance. Besides, they have to review the financial statements and disclosures of notes in the financial statement, and annual and provisional remunerations news announcements before they are publicly disclosed. Additionally, the Audit Committee should review arrangements by which staff if the company may, in confidence, raise concerns about possible irregularity in matters of financial reporting or other matters to detect fraud. The Audit Committee objective is to ensure that arrangements are in place for the independent investigation of such matters for appropriate follow up action.
The National Commission was made up of various industry representatives who studied the underlying causes that lead to fraudulent financial reporting. The committee developed recommendations for public companies, independent auditors, regulators, and educational organizations, which are designed to improve "the quality of financial reporting through business ethics, effective internal controls, and corporate governance"(COSO, n.d., 1). Recognizing the need for organizations to evaluate risk management efforts, COSCO developed a framework for Enterprise Risk Management (ERM) that Morrison Management Specialists and other companies can use to establish strong internal controls. Enterprise Risk Management ERM is a controlled approach to help management identify and manage uncertainties and reach certain risk objectives. COSO's ERM framework concentrates on the development of a strategy that includes the importance of a risk and internal control "consciousness" throughout an organization.
Firstly, external auditors need inquiry the tone of the top, because it can affect the culture, ethical behaviors and management of company, and also have an influence on completing expected value and internal budget. The auditors and the company negotiated the audit objectives, including the focus of audit content. The company authorized to audit staff, through a dedicated data port on the system to do real-time monitoring. We found the problem, real-time notification of the Board of Directors. Besides, auditors should estimating the significance and likelihood of occurrence of the risks that mentioned in the last part.
This auditing will be conducted by auditing department of the organization, even may be done by an independent auditor who is not part of the organization, and sometimes public officials are elected. In case of unmatched consequences the organization need to give explanation on the misrepresentation of wrong statements. Auditors purpose is then to ensure that the misrepresentations are corrected, then maintain accurate, reliable financial documents and statements. CONCLUSION According to business, or any organization, Accounting plays a major role in developing and growth of the business. Financial standards of the organization expected as the complexities of business growth and expansion.
The information provided in the financial statements under the financial accounting system is used by auditors to analyze the businesses financial position. Maintaining an accounting standard for report for external users is al... ... middle of paper ... ...nancial information and how to analyze the information reported. While each type of accounting is necessary, they are aimed at different audiences and have various standards that are necessary to adequately evaluate the financial position of the company. Financial accounting is primarily the function of putting financial statements together in accordance to GAAP so that the information can be viewed and analyzed for external users, including auditors and shareholders. Managerial accounting is the process of compiling financial statements that will aid the management team in making decisions for the organization.