Audit

Audit

Auditing is one of most important aspects of financial institutions. Today, the auditing firms in Europe in general, and in Britain in particular are in a state of shock in the wake of recent media reports regarding the prevailing irregularities in the financial sector. The company's crisis can be explained by the influence of external factors, they can be the determining cause much of its success or failure without giving up their course on the influence of internal factors must also be taken into account. This approach can help guide the development of more accurate diagnoses for the company in crisis. A global treatment of the problems of accounting involves the study of the relationship between the company and its environment from a spatial perspective, the question that arises is how to characterise and describe the space within which the company exists (Power, Pp. 112).

Auditing the Financial Reports

In this world of competition, auditing firms have to remain alert round the clock to see whether the concerned firms are conducting their operations within the limits and the sanctity of the provisions of the international standards or not. Currently, the hierarchical structure of most companies is quite complicated, involves several levels of management and is characterised by mutual participation in the capital of each other, which complicates the reporting of information by users and allows the veil in the financial statements. According to an international survey of institutional investors conducted by PricewaterhouseCoopers 62 percent of respondents agreed on the fact that companies are very arbitrarily withdraw their reporting earnings in any given period. Dissatisfaction with users reporting information on financial results and financial position of the company requires further development of methods of accounting and auditing accounting data segments (Matthews, Pp. 45).

In practice, unlike the British or the European, the stakeholders ought to play a significant role in the internal and external audit of consolidated reports. Furthermore, the development of auditing the consolidated financial statements is important in securing access to interested users to high-quality, reliable and comparable financial information on the performance of companies.

At present consolidated financial statements does not only informational function, but is the basis for management decisions to interested users. Community Consolidated Statements reduce their risks when making decisions, if confirmed by the statements of the auditors. Among the main directions of tax policy for 2008-2010, released by Ministry of Finance is scheduled to introduce a consolidated tax on profits.

Purpose of Effective Auditing

The main objective of the audit is to help firms establishing the reliability of accounting (financial) statements of economic agents and improved compliance with their financial and business transactions regulations to check:

Whether all the assets and liabilities reflected in the report;

Whether all the documents used in the report;

Since the International Standards on auditing the consolidated financial statements have no sound basis, they have failed to regulate auditing firms to work under the provisions prescribed therein. This lack of application has given companies to develop auditing principles of their own.

Consolidated financial statements are based on data reporting ...