STATUTORY AUDITS IN TODAY'S BUSINESS

Relevance of Statutory Audits in Today's Business Environment; Managing the Expectation Gap

Relevance of Statutory Audits in Today's Business Environment; Managing the Expectation Gap

Introduction

Business environmental audit is a process to determine compliance of our operations practices and regulatory requirements, policies and procedures of the company and recognized standards. It consists of systematic and objective assessment activities the company announced a periodicity, which focuses on: Verify compliance with environmental regulations, internal policies and authorized procedures. Evaluate the effectiveness of "management systems" of the environment set up, and Identify and assess any risk associated with reasonably foreseeable conditions of risk attributable to our activities, and prevent or reduce such risks (Accountancy, 1995: 125).

The high administrative costs of Community law limit the competitiveness of European enterprises. In addition, legislation on company law, accounting and auditing has not kept pace with the business environment. The Commission proposes to review the EU directives in this field and its relevance. These proposals should be subject to debate in the Member States, the European Parliament and stakeholders to reach consensus and submit legislative proposals.

Discussion Analysis

The European Commission launched in October an extensive consultation on the role of statutory audit and the overall environment in which they occurs audits. The crisis Financial has made ??it necessary to ask whether it should improve the function of the auditors to reduce any possible new financial risk in the future. The crisis has also revealed certain weaknesses in the audit sector should further explored (Guthrie, 1992: 27). This work on the audit is part of efforts aimed to learn from the experience of crisis and reform the financial sector. Statutory audits are requirement for every listed company to follow. It is the obligation imposed on certain companies. It includes audited annual accounts and consolidated by a qualified professional.

Although the Fourth and Seventh Directives require certain firms to their accounts audited annual and consolidated by a qualified professional, they do not provide a definition of the statutory (International Federation of Accountants, 2010: 15). Similarly, the guidelines relating to the accounts of banks, on the one hand, and businesses insurance, on the other hand, require a statutory audit without specifying its nature. As defined by the International Federation of Accountants (IFAC), the objective of an audit is to enable the person who is responsible to indicate whether in his opinion, the financial statements have been prepared, in all material respects, accordance with the framework used in the presentation of information Financial. It is clear from numerous studies that there are considerable differences between what that the public expects from an audit and that the accounting profession considers as its mission. This difference in perception is a major problem for the auditors since the more it is, the more credibility and prestige associated his work suffers. The question also concerns the general public because the functioning market economy depends largely on the confidence in audited financial statements (Lee, 1995: 64).

The role of the auditor been in recent times many discussions ...