Research Topics: Auditing Essays

Diffrent Kinds Of Auditing

Different Kinds of Auditing   Conventionally, auditing primarily associated with getting valid information about the financial systems as well as the financial records of a firm or business.  But, nowadays, it already involves other non-financial areas in non profit organizations and government agencies such as safety, security, information systems performance and environment concerns. Similarly,   it is a process of evaluating a person, organization, system, company, project or product.  In the same way it applies also to project, quality and energy conservation management.  As a result, there are now audit professionals who specialized in security audits, information systems audits, and environmental audits. This process is performed by accounting professionals in order to assure the validity and reliability of information; as well as to provide an assessment on the internal control of the organization.  The goal of auditing is to express an opinion of the person / organization / system in question, under evaluation based on work done on a test basis.  Additionally, it seeks also to provide reasonable assurance that the finding and statements are 100 percent free from any error.  And, in the case of financial auditing, there must be a set of financial statements    to be showed up which are valid and completely free from misstatements.  This will be based on both quantitative and qualitative research.  (http://en.wikipedia.org/wiki/Audit) On the other hand, in cost accounting, auditing is a process for verifying the cost of manufacturing or producing of any article, in measuring the use of material, labor or other items of cost.  In this connection, cost auditing, is a systematic and accurate verification of the cost accounts and records, and checking for adherence to the cost accounting objectives. An audit must adhere to accepted standards established by governing bodies. These standards assure third parties or external users that they can rely upon the auditor’s opinion on the fairness of financial statements, or other subjects on which the auditor expresses an opinion. Furthermore, auditors of financial auditing are divided into two types.  First is the external  or statutory auditing , this is an independent public accounting firm  that  deals with auditing and expressing a valid opinion on the company’s financial statements.  In addition, external auditors are   independent auditors who are being paid by various companies for auditing job.  The second is the internal auditing; the   internal auditors are employed by the company to do the internal auditing on the financial transactions and statements of the organization. The internal auditors are performing different audit procedures related to the policy over the effectiveness of the firm’s internal control over the financial reporting.   Whatever the results of the financial auditing, it may be forwarded to the shareholders, banks and whoever that is authorized to see the evaluation of the financial standing of the company.  Also, the main objective of the financial audit is to make sure that no one in the company is practicing any fraudulent act.  Subsequently, quality auditing is performed to be able to verify the conformity to standards by reviewing the objective evidence.  The quality audits can verify the effectiveness the quality of the management system of problem areas.  For the benefit of any organization, quality auditing must also report the areas of good practice as well as it enables to provide evidence of conformance.  By doing this, other departments of the company can share various information and modify their working attitudes and practices later on. (http://www.wisegeek.com/what-is-financial-auditing.htm) On the other side, there is another kind of auditing and that is the Scientology auditing.  It is a unique form of personal counseling to an individual which helps him    to   analyze his   own existence and improves his or her ability to confront what he is and where he is. There are vast differences between the technology of auditing and other forms of counseling. The person being audited is completely aware of everything that happens. Auditing is an accurate as well as thoroughly codified activity along with the exact procedures.   A person trained and qualified in applying auditing to individuals for their betterment is called an auditor. He is the one who listens.    He is a minister or minister-in-training of the Church of Scientology. He is a person who receives auditing and called a preclear, meaning a person who is not being clear about the status of her life.     However, New Era Diabetic auditing is also a peculiar process to evaluate the mental status of a person. This kind of auditing is freeing a person   from anxieties, fears,   unpleasant emotions and pains; as well as it provides the person a new level of self-determination to become better individual. (http://scientologyexposed.50megs.com/auditing.html) References: http://en.wikipedia.org/wiki/Audit http://www.wisegeek.com/what-is-financial-auditing.htm http://scientologyexposed.50megs.com/auditing.html   Credit:ivythesis.typepad.com

Diffrent Kinds Of Auditing

Different Kinds of Auditing Conventionally, auditing primarily associated with getting valid information about the financial systems...

Advanced Auditing Practice

Overview Perhaps, every organization wants to initiate an analytical auditing system and auditing strategy that could maintain the organization’s capability, strength and competitiveness. The dramatic changes and advances in communications and information technology facilitated the way towards a sustained progress in the international business and finance environment. The low cost and the efficiency as well as the attractiveness of conducting and entering any business venture – local or international in nature were made available by these technological advances which characterize the global marketplace. Today, greater challenges are faced by financial managers and accountants as opportunities for growth as well as possibilities of risks increase in the current and more attractive business world.             This paper aims to discuss the significant role of an analytical auditing system in relation to the introduction of advanced auditing practices. It sought to find relevant applications of information gathered through management accounting. In the end, it suggests some ways to effectively implement the gathered information for the advantage and benefit of the company paying particular attention to an analytical auditing system. Introduction Analytical auditing is the inspection and verification of the accuracy of financial records and statements. Private businesses and all levels of government conduct internal audits of accounting records and procedures. Internal audits are conducted by a company’s own personnel to uncover bookkeeping errors and also to check the honesty of employees. In large companies, internal auditing is an ongoing procedure. A company that trades stock on a registered stock exchange or is preparing to issue new shares of stock must submit to an external audit. These companies are known as publicly traded companies (2000. An external audit is used to give the public a true statement of a company’s financial position. It is made at least once a year by public accountants who are not regular employees of the company. The auditors make sure that the company has followed proper accounting procedures in its financial records and statements. They compare the current financial statements with those of the previous year to determine whether the statements are calculated consistently. If they are not, they present a distorted picture of the company’s financial position. The auditors also inspect real estate, buildings, and other assets to see if their value is overstated. Debts and other liabilities are checked to see if they have been understated (1999). Analytical auditing practice has a much longer history than many of the other developments that can be considered and the large firms of accountants, in which many financial auditors work have become influential advisory institutions throughout the world.  Thus Analytical auditing has provided the model which has influenced the design of auditing practice in many other fields. Although environmental, medical, or value for money audits are conceived as distinct from financial auditing, the latter continues to exert its normative influence as a centre of gravity for debate and discussion. And it is in the context of Analytical auditing that the dependency of acts of verification on judgment and negotiation is most apparent. The power of the analytical auditing model lies in its benchmarking potential for other audit practices. In part this potential is realized indirectly through the work of accountant advisors, for whom the analytical auditing model is a fundamental component of their expertise and whose advice in areas of control is shaped by it. But the influence can also be direct as entities such as hospital trusts, privatized industries, charities, and many other organizations become subject to an intensification of financial control and reporting requirements. This is an expanding domain, not just of neutral checking but also of judgment and of an evaluation of the fundamental purposes of organizations. Paradoxically, given the influential role of the analytical auditing model suggested above, its status as a practice is unclear. What do audits produce and how are they effective? (2002). Analytical auditing is subject to expectations and demands which are, justifiably or otherwise, often disappointed. Nevertheless, the official procedural knowledge base of auditing has evolved in response to scandals and corporate failures in such a way that the essential puzzle of what audits produces their effectiveness remains hidden from view as an article of faith. Finally despite, and probably because of, this puzzle it is argued that financial auditing maintains itself as an institutionally credible system of knowledge. Notwithstanding crisis and scandal it satisfies the aspirations and demands of a variety of regulatory programs. Particular audits may fail but the system as such cannot. The possibility of effective auditing is necessarily presupposed by regulatory intentions. Traditionally, analytical auditing has applied itself to the domain of finance, but organizations are increasingly finding value from internal audits that monitor other aspects of their activity. Environmental and social audits, for example, have been championed by firms in response to the ethical concerns of both shareholders and the public in relation to the company’s impact upon the locality. Analytical auditing is growing in importance too, partly in response to recent major scandals such as the collapse of banks, and also in order to monitor the increasingly complex demands being made upon accountants ( 2002). However, auditing remains something of a mystery to those outside of the profession, and has become more specialized as accounting has become more sophisticated. For example, while best practice has evolved certain tools for analytical review or establishing audit trails, an element of subjective judgment remains as auditors decide what evidence to include. Further, rules of thumb can never be ruled out. Audit risk has developed as an issue too, as the models for reducing the probability of mistakes being made on sampling, for example, become more subtle. In countries such as Canada these have changed dramatically. Here, a Bayesian approach was introduced in 1980. Auditors recognize the limitations of their science. They are not held responsible for detecting fraud, for example. Analytical auditing provides a degree of assurance, but not insurance, as to the financial position of the firm (2002). The Cyclical Testing Method Readers of financial statements of foreign companies audited by major international accounting firms through the cyclical testing method assume a uniformly high quality of information. International differences in audit objectives, standards and practice, however, of the cyclical testing method result in varying levels of audit assurance. Cyclical testing method users and accountants whose clients demand expertise in all phases of financial accounting and reporting matters whether domestic and international need to be aware of these differences. The development of cyclical testing method standards and practice in different countries is influenced by numerous factors including the nature of financing, the size and complexity of businesses and capital markets, tax laws and the legal environment. In the United States and the United Kingdom, many owners provide much of the financing for public companies, and capital markets are large and sophisticated ( 1996). As a result, shareholders’ needs significantly influence financial statements and independent audits, and private-sector bodies have a strong impact on both accounting and audit standard setting. In Germany, a small number of large banks and pension funds traditionally supply most business capital, and ownership and voting rights generally are concentrated. One result is less demand for independent audits and for a sophisticated, investor-oriented financial reporting system. Another is that the German accounting profession has less influence in establishing accounting standards which are set primarily by commercial laws. However, as in the United States and the United Kingdom, the accounting profession has played an important role in developing audit standards. International differences in business, legal and cultural environments also have led to varying audit objectives. Consistent with a strong investor orientation, the audit objective in the United States is to express an opinion on whether the financial statements present fairly, in all material respects, financial position, results of operations and cash flows in conformity with generally accepted accounting principles. The strong presumption is that to present fairly, financial statements must conform to generally accepted accounting principles (GAAP). Departures are permitted only in rare instances (1996). Annual certification approach The annual certification approach is a description and discussion of the auditor’s responsibility to consider fraud in the audit of financial statements. It is divided into different titles that includes an introduction; the description of the characteristics of fraud; description of the responsibilities of those charged with governance and of management; the inherent limitations of an audit in the context of fraud; the responsibilities of the auditor for detecting material misstatement due to fraud; professional skepticism; discussion among the engagement team; risk assessment procedures; identification and assessment of the risks of material misstatement due to fraud; responses to the risks of material misstatement due to fraud; evaluation of audit evidence; management representations; communications with management and those charged with governance; communications to regulatory and enforcement authorities; auditor unable to continue the engagement; documentation; effective date (1994). This annual certification approach distinguishes fraud from error and describes the two types of fraud that are relevant to the auditor, that is, misstatements resulting from misappropriation of assets and misstatements resulting from fraudulent financial reporting; describes the respective responsibilities of those charged with governance and the management of the entity for the prevention and detection of fraud, describes the inherent limitations of an audit in the context of fraud, and sets out the responsibilities of the auditor for detecting material misstatements due to fraud. The annual certification approach also requires the auditor to maintain an attitude of professional skepticism recognizing the possibility that a material misstatement due to fraud could exist, notwithstanding the auditor’s past experience with the entity about the honesty and integrity of management and those charged with governance. Moreover the annual certification approach requires members of the engagement team to discuss the susceptibility of the entity’s financial statements to material misstatement due to fraud and requires the engagement partner to consider which matters are to be communicated to members of the engagement team not involved in the discussion. The annual certification approach requires auditor to do certain things such as performing procedures to obtain information that is used to identify the risks of material misstatement due to fraud; identifying and assessing the risks of material misstatement due to fraud at the financial statement level and the assertion level and for those assessed risks that could result in a material misstatement due to fraud, evaluate the design of the entity’s related controls, including relevant control activities, and to determine whether they have been implemented; determining overall responses to address the risks of material misstatement due to fraud at the financial statement level and consider the assignment and supervision of personnel, consider the accounting policies used by the entity and incorporate an element of unpredictability in the selection of the nature, timing and extent of the audit procedures to be performed; designing and performing audit procedures to respond to the risk of management override of controls; determining responses to address the assessed risks of material misstatement due to fraud; considering whether an identified misstatement may be indicative of fraud; obtaining written representations from management relating to fraud; and communicating with management and those charged with governance. The annual certification approach provides guidance on communications with regulatory and enforcement authorities. The standard provides guidance if, as a result of a misstatement resulting from fraud or suspected fraud, the auditor encounters exceptional circumstances that bring into question the auditor’s ability to continue performing the audit. Lastly the standard establishes documentation requirements (2000). Modifications of Analytical Auditing Approach The analytical auditing approach mentioned that it is management’s responsibility to ensure that the entity’s operations are conducted in accordance with laws and regulations. The responsibility for the prevention and detection of noncompliance rests with management ( 2005). There are policies and procedures that can assist management in discharging its responsibilities for the prevention and detection of noncompliance this includes monitoring legal requirements and ensuring that operating procedures are designed to meet these requirements.             In introducing the analytical auditing approach, proper research and studies should be made in order to define and maneuver the direction of the whole plan. Setting up the ideas and presenting them to the figures of authority for a rich exchange of views will be helpful in generating plans that will be best for the organization. The company should be conscious and cautious in terms of the savings and the transparency of the expenditures. The people involved should also have the guts and the character to make the long-term plans a success by initiating efforts that will make such conjured ideas possible and tangible in the future. Specifying the date and time frame of executing the introduction of the analytical auditing approach that will make its attainment possible will push and business to start right on and take the challenge. As much as possible, hesitations should not be acknowledge unless there are enough reasons to postpone the initial execution of the plans that will be more risky than the imagined drawbacks of the analytical auditing approach. They should be sensitive in making delays and lagging off from the defined plan and tactics as well as in the changes and differences of the actual application and that of the plan.             It would also be advisable to get help and consult from a professional finance consultant, certified accountants, and other corporate professional with sufficient know-how in management accounting especially with respect to pricing decision-making (2005). The rationale behind this is that they can provide information and views that were not pointed out and brought up during the planning period. They can also plan and foresee circumstances that serve as a financial back up for the emergencies and difficulties that were not foreseen while coming up with the plans. In managing the introduction of analytical auditing approach in the company with respect to the principle of management accounting, it is of primary importance that the resources and the welfare of the company are identified. From these resources, the people in the general management especially the manager to be selective in choosing the price and other financial resources that the company will invest in. The nature of the analytical auditing approach should be studied so that the opportunities that it offers can be fully exhausted by the company ( 2004).             Strategic planning could be only successful if the circumstances of the introduction of analytical auditing approach that will be made are well examined and researched (2005). This will prepare the whole business in the problems and issues that the company may confront during the introduction of the analytical auditing approach. However, this does not assure that there will be no problems that will exist and confront the venture. The analytical auditing approach cannot be put in isolation from the whole organization. The price, budget and all the investment, and profit growth possibilities that the company can venture in all depend on its overall capacity which will make the operations of the business possible. Coordination between and among the department within the organization as well as among all the staff and employees should be fostered in the workplace for the immediate success of the business endeavor.     Credit:ivythesis.typepad.com

Advanced Auditing Practice

Overview Perhaps, every organization wants to initiate an analytical auditing system and auditing strategy that could maintain the organ...

Advanced Auditing Practice

Overview Perhaps, every organization wants to initiate an analytical auditing system and auditing strategy that could maintain the organization’s capability, strength and competitiveness. The dramatic changes and advances in communications and information technology facilitated the way towards a sustained progress in the international business and finance environment. The low cost and the efficiency as well as the attractiveness of conducting and entering any business venture – local or international in nature were made available by these technological advances which characterize the global marketplace. Today, greater challenges are faced by financial managers and accountants as opportunities for growth as well as possibilities of risks increase in the current and more attractive business world.             This paper aims to discuss the significant role of an analytical auditing system in relation to the introduction of advanced auditing practices. It sought to find relevant applications of information gathered through management accounting. In the end, it suggests some ways to effectively implement the gathered information for the advantage and benefit of the company paying particular attention to an analytical auditing system. Introduction Analytical auditing is the inspection and verification of the accuracy of financial records and statements. Private businesses and all levels of government conduct internal audits of accounting records and procedures. Internal audits are conducted by a company’s own personnel to uncover bookkeeping errors and also to check the honesty of employees. In large companies, internal auditing is an ongoing procedure. A company that trades stock on a registered stock exchange or is preparing to issue new shares of stock must submit to an external audit. These companies are known as publicly traded companies (, 2000.)  An external audit is used to give the public a true statement of a company’s financial position. It is made at least once a year by public accountants who are not regular employees of the company. The auditors make sure that the company has followed proper accounting procedures in its financial records and statements. They compare the current financial statements with those of the previous year to determine whether the statements are calculated consistently. If they are not, they present a distorted picture of the company’s financial position. The auditors also inspect real estate, buildings, and other assets to see if their value is overstated. Debts and other liabilities are checked to see if they have been understated ( &  1999). Analytical auditing practice has a much longer history than many of the other developments that can be considered and the large firms of accountants, in which many financial auditors work have become influential advisory institutions throughout the world.  Thus Analytical auditing has provided the model which has influenced the design of auditing practice in many other fields. Although environmental, medical, or value for money audits are conceived as distinct from financial auditing, the latter continues to exert its normative influence as a centre of gravity for debate and discussion. And it is in the context of Analytical auditing that the dependency of acts of verification on judgment and negotiation is most apparent. The power of the analytical auditing model lies in its benchmarking potential for other audit practices. In part this potential is realized indirectly through the work of accountant advisors, for whom the analytical auditing model is a fundamental component of their expertise and whose advice in areas of control is shaped by it. But the influence can also be direct as entities such as hospital trusts, privatized industries, charities, and many other organizations become subject to an intensification of financial control and reporting requirements. This is an expanding domain, not just of neutral checking but also of judgment and of an evaluation of the fundamental purposes of organizations. Paradoxically, given the influential role of the analytical auditing model suggested above, its status as a practice is unclear. What do audits produce and how are they effective? ( 2002). Analytical auditing is subject to expectations and demands which are, justifiably or otherwise, often disappointed. Nevertheless, the official procedural knowledge base of auditing has evolved in response to scandals and corporate failures in such a way that the essential puzzle of what audits produces their effectiveness remains hidden from view as an article of faith. Finally despite, and probably because of, this puzzle it is argued that financial auditing maintains itself as an institutionally credible system of knowledge. Notwithstanding crisis and scandal it satisfies the aspirations and demands of a variety of regulatory programs. Particular audits may fail but the system as such cannot. The possibility of effective auditing is necessarily presupposed by regulatory intentions. Traditionally, analytical auditing has applied itself to the domain of finance, but organizations are increasingly finding value from internal audits that monitor other aspects of their activity. Environmental and social audits, for example, have been championed by firms in response to the ethical concerns of both shareholders and the public in relation to the company’s impact upon the locality. Analytical auditing is growing in importance too, partly in response to recent major scandals such as the collapse of banks, and also in order to monitor the increasingly complex demands being made upon accountants ( 2002). However, auditing remains something of a mystery to those outside of the profession, and has become more specialized as accounting has become more sophisticated. For example, while best practice has evolved certain tools for analytical review or establishing audit trails, an element of subjective judgment remains as auditors decide what evidence to include. Further, rules of thumb can never be ruled out. Audit risk has developed as an issue too, as the models for reducing the probability of mistakes being made on sampling, for example, become more subtle. In countries such as Canada these have changed dramatically. Here, a Bayesian approach was introduced in 1980. Auditors recognize the limitations of their science. They are not held responsible for detecting fraud, for example. Analytical auditing provides a degree of assurance, but not insurance, as to the financial position of the firm ( 2002). The Cyclical Testing Method Readers of financial statements of foreign companies audited by major international accounting firms through the cyclical testing method assume a uniformly high quality of information. International differences in audit objectives, standards and practice, however, of the cyclical testing method result in varying levels of audit assurance. Cyclical testing method users and accountants whose clients demand expertise in all phases of financial accounting and reporting matters whether domestic and international need to be aware of these differences. The development of cyclical testing method standards and practice in different countries is influenced by numerous factors including the nature of financing, the size and complexity of businesses and capital markets, tax laws and the legal environment. In the United States and the United Kingdom, many owners provide much of the financing for public companies, and capital markets are large and sophisticated ( &  1996). As a result, shareholders’ needs significantly influence financial statements and independent audits, and private-sector bodies have a strong impact on both accounting and audit standard setting. In Germany, a small number of large banks and pension funds traditionally supply most business capital, and ownership and voting rights generally are concentrated. One result is less demand for independent audits and for a sophisticated, investor-oriented financial reporting system. Another is that the German accounting profession has less influence in establishing accounting standards which are set primarily by commercial laws. However, as in the United States and the United Kingdom, the accounting profession has played an important role in developing audit standards. International differences in business, legal and cultural environments also have led to varying audit objectives. Consistent with a strong investor orientation, the audit objective in the United States is to express an opinion on whether the financial statements present fairly, in all material respects, financial position, results of operations and cash flows in conformity with generally accepted accounting principles. The strong presumption is that to present fairly, financial statements must conform to generally accepted accounting principles (GAAP). Departures are permitted only in rare instances ( &  1996). Annual certification approach The annual certification approach is a description and discussion of the auditor’s responsibility to consider fraud in the audit of financial statements. It is divided into different titles that includes an introduction; the description of the characteristics of fraud; description of the responsibilities of those charged with governance and of management; the inherent limitations of an audit in the context of fraud; the responsibilities of the auditor for detecting material misstatement due to fraud; professional skepticism; discussion among the engagement team; risk assessment procedures; identification and assessment of the risks of material misstatement due to fraud; responses to the risks of material misstatement due to fraud; evaluation of audit evidence; management representations; communications with management and those charged with governance; communications to regulatory and enforcement authorities; auditor unable to continue the engagement; documentation; effective date (, 1994). This annual certification approach distinguishes fraud from error and describes the two types of fraud that are relevant to the auditor, that is, misstatements resulting from misappropriation of assets and misstatements resulting from fraudulent financial reporting; describes the respective responsibilities of those charged with governance and the management of the entity for the prevention and detection of fraud, describes the inherent limitations of an audit in the context of fraud, and sets out the responsibilities of the auditor for detecting material misstatements due to fraud. The annual certification approach also requires the auditor to maintain an attitude of professional skepticism recognizing the possibility that a material misstatement due to fraud could exist, notwithstanding the auditor’s past experience with the entity about the honesty and integrity of management and those charged with governance. Moreover the annual certification approach requires members of the engagement team to discuss the susceptibility of the entity’s financial statements to material misstatement due to fraud and requires the engagement partner to consider which matters are to be communicated to members of the engagement team not involved in the discussion. The annual certification approach requires auditor to do certain things such as performing procedures to obtain information that is used to identify the risks of material misstatement due to fraud; identifying and assessing the risks of material misstatement due to fraud at the financial statement level and the assertion level and for those assessed risks that could result in a material misstatement due to fraud, evaluate the design of the entity’s related controls, including relevant control activities, and to determine whether they have been implemented; determining overall responses to address the risks of material misstatement due to fraud at the financial statement level and consider the assignment and supervision of personnel, consider the accounting policies used by the entity and incorporate an element of unpredictability in the selection of the nature, timing and extent of the audit procedures to be performed; designing and performing audit procedures to respond to the risk of management override of controls; determining responses to address the assessed risks of material misstatement due to fraud; considering whether an identified misstatement may be indicative of fraud; obtaining written representations from management relating to fraud; and communicating with management and those charged with governance. The annual certification approach provides guidance on communications with regulatory and enforcement authorities. The standard provides guidance if, as a result of a misstatement resulting from fraud or suspected fraud, the auditor encounters exceptional circumstances that bring into question the auditor’s ability to continue performing the audit. Lastly the standard establishes documentation requirements (, 2000). Modifications of Analytical Auditing Approach The analytical auditing approach mentioned that it is management’s responsibility to ensure that the entity’s operations are conducted in accordance with laws and regulations. The responsibility for the prevention and detection of noncompliance rests with management (, 2005). There are policies and procedures that can assist management in discharging its responsibilities for the prevention and detection of noncompliance this includes monitoring legal requirements and ensuring that operating procedures are designed to meet these requirements.             In introducing the analytical auditing approach, proper research and studies should be made in order to define and maneuver the direction of the whole plan. Setting up the ideas and presenting them to the figures of authority for a rich exchange of views will be helpful in generating plans that will be best for the organization. The company should be conscious and cautious in terms of the savings and the transparency of the expenditures. The people involved should also have the guts and the character to make the long-term plans a success by initiating efforts that will make such conjured ideas possible and tangible in the future. Specifying the date and time frame of executing the introduction of the analytical auditing approach that will make its attainment possible will push and business to start right on and take the challenge. As much as possible, hesitations should not be acknowledge unless there are enough reasons to postpone the initial execution of the plans that will be more risky than the imagined drawbacks of the analytical auditing approach. They should be sensitive in making delays and lagging off from the defined plan and tactics as well as in the changes and differences of the actual application and that of the plan.             It would also be advisable to get help and consult from a professional finance consultant, certified accountants, and other corporate professional with sufficient know-how in management accounting especially with respect to pricing decision-making (, 2005). The rationale behind this is that they can provide information and views that were not pointed out and brought up during the planning period. They can also plan and foresee circumstances that serve as a financial back up for the emergencies and difficulties that were not foreseen while coming up with the plans. In managing the introduction of analytical auditing approach in the company with respect to the principle of management accounting, it is of primary importance that the resources and the welfare of the company are identified. From these resources, the people in the general management especially the manager to be selective in choosing the price and other financial resources that the company will invest in. The nature of the analytical auditing approach should be studied so that the opportunities that it offers can be fully exhausted by the company (, 2004).             Strategic planning could be only successful if the circumstances of the introduction of analytical auditing approach that will be made are well examined and researched (, 2005). This will prepare the whole business in the problems and issues that the company may confront during the introduction of the analytical auditing approach. However, this does not assure that there will be no problems that will exist and confront the venture. The analytical auditing approach cannot be put in isolation from the whole organization. The price, budget and all the investment, and profit growth possibilities that the company can venture in all depend on its overall capacity which will make the operations of the business possible. Coordination between and among the department within the organization as well as among all the staff and employees should be fostered in the workplace for the immediate success of the business endeavor.     REFERENCES   Credit:ivythesis.typepad.com

Advanced Auditing Practice

Overview Perhaps, every organization wants to initiate an analytical auditing system and auditing strategy that could maintain the organ...

Audit Commission

Audit Commission   Introduction             Business organizations in both public and private sectors perform a variety of tasks and responsibilities that enable it to function in an effective manner. These tasks and responsibilities are distributed among teams, which are assigned to fulfill their duties in a specific organization. All designated tasks are equally important in a company, thus, making all employees and staff crucial to the operations of the organization. One of the crucial functions in both public and private organizations is the process of auditing.             It has been reported that an audit is an evaluation of an organization, system, process, project or product, which involves the independent and fair assessment of the financial statements of the organization (2007). Knowledgeable, independent, and objective individual or group of individuals, known as auditors or accountants, makes a report based on the results of the audit. In addition, this function is performed to determine the reliability and validity of financial information, and to present an evaluation of a specific company or an internal control of a particular business system, for these systems must comply with the generally accepted standards laid down by national governing bodies for regulation (2007). Because of such importance, this paper seeks to analyze and evaluate the external auditing and its role in the public and private sectors.   1) What are the advantages of having a national body to appoint and oversee the work of external auditors in the public sector?             External auditors are independent staffs that are assigned to evaluate financial statements or to perform other agreed upon evaluations, are employed for annual engagements and called upon from the external environment of the organization (2007). In addition, they are being relied on to present an unbiased and independent assessment on the financial statements and legal entities of an organization, such as the government or private sectors. Their role is to communicate their opinions if the financial statements of a company are free of material misstatements, including investigation of issues on regulation and taxation, which are based on the internal controls of the company ( 2007). In a public sector, the work of external auditors is equally important because they serve to alert or warn the organization regarding policies, issues and other inaccuracies in terms of their internal control or audit ( 2005). However, in overseeing the work of external auditors, a responsible national body must be assigned to do the tasks. Having a national body in the public sector involves a variety of advantages or benefits. These advantages, as pointed out by  (1993) include the following: <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Achieve mutual understanding in the planning process – This involves coming up with cost-effective process for the cost reduction of the organization.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Advantage of the public sector in producing and supervising a report in an appropriate, fair, and timely manner</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Observing professional work ethics – This can exist between the national body and the external auditors to achieve mutual understanding and teamwork.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Understanding their roles and working together to facilitate effective arrangements</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Practice effective communication – With the supervision of the national body, proper information regarding the organization will be effectively shared and dissipated to the external auditors for more reliable and credible data</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Reinforce and reinstate purpose and process of the audit</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Overseeing their work would allow the national body to recognize matters of concern, which they would like their external auditors to consider in the audit</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Through supervision of a national body, the external auditors can plan coordinating with the organization’s internal auditors when needed – This would produce more accurate and reliable data </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Overseeing and appointing the work of external auditors would prevent potential problems that may arise, such as access to information or people – In avoiding this, a smooth and credible external audit can be facilitated.</li> </ul>   With such advantages, the external auditors will be able to produce an unbiased audit regarding the public sector’s entities, with the guidance and supervision of its national body. This not only enhances and develops the relationship and communication of both parties, but also contributes to the improvement of the coordination and teamwork being exhibited in the public sector.   2) What is the role of the auditor in respect of policy decisions made by audited bodies?             Because auditors have the access to the financial data of organizations, they are governed by specific rules and policies in accordance to information and data disclosure. This is especially applicable to external auditors, who are considered as third parties; for these policies aim to prevent dissipating important data from getting into the wrong people (2006). In addition, because policymakers have always considered auditor changes to be important events, auditors are required to enable detailed and timely disclosures, and monitoring such disclosures, require the report by both the auditor and the client ( 2002). With such importance, the role of auditors on policy decision made by the organization must be given emphasis. This would reinforce the limitations of auditors and prevent irresponsible use of such valuable information.             With respect to policy decisions, the primary role of auditors is maintaining a good and effective communication at all stages of the audit, specifically to become clear about the process and goals of the audit. Second, because of some limits to openness that should be retained to maintain effectiveness of audit, the auditors must protect the interest of the organization, by not disclosing some details of their audits, such as those that address the risk of fraud. Third, auditors must fully consider the needs of the audited bodies in relation to the timing of the audit. In relevance to this, the auditors should agree a sensible timetable for submission of good quality and complete accounts. In addition, with respect to policies of the organization, the auditors must plan their work effectively to minimize business interruption. Moreover, the auditors must reduce changes in key audit personnel from one year to the next in allowing audit staff to develop a sound business understanding with the organization it audits, and deliver the full potential benefit of their accumulated knowledge and experience (2000). With these roles, auditors will be able to maintain and sustain a good relationship with the organization, thus, upholding compliance to the policies and rules being implemented by the organization. From this compliance, the auditors will be able to prevent the irresponsible use of such important information. Emphasizing and reinforcing their roles will enable and ensure the organizations they serve that their disclosed information and data will be protected and secured, thus, ensuring a smooth relationship between both parties.   3) In what ways could value for money auditing be applied to the private sector?             Value for money auditing is a recent expansion in the scope of auditing, and generally applies in the public sector, which expresses concern with regularity of spending and compliance with rules, laws, and regulations. It also referred to as performance auditing, comprehensive auditing, management auditing and efficiency auditing ( 2003). Its most important objective managing financial, human and physical resources, with due regard to economy, efficiency and effectiveness ( 2003). Despite its usefulness in the public sector, this form of auditing can also be useful and applicable in the private sector in accordance to the evaluation of its respective core values, including economy, efficiency and effectiveness. In addition, its relevance to the private sector can be applied in using the 4 Pillars Approach. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Economy – This core value is defined as reducing the cost of resources that was used for an activity in relation to its appropriate quality, wherein relevant resources include physical, financial, human and information ( 2003). In value for money auditing, resources are given much importance because an organization must be able to obtain the right amount, quality and cost of resources, at the right place, and at the right time ( 2003). If this is very applicable and relevant in the public sector, then it is also equally applicable and relevant in the private sector for having the same resources. Private sectors must also give emphasis to economy to achieve cost reduction in their operations. With giving importance to economy, private sectors would be more efficient and effective in allocating their resources, thus, providing more for the different functions and teams within the organization. Moreover, this would enable the organization to give importance and care for the welfare of its employees, customers, stakeholders, and its community. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Efficiency – This refers to the relationship of inputs and outputs, which is relevant to the use of resources, and measuring it presumes the existence of acceptable standards ( 2003). Efficiency standards in relation to value for money auditing will be useful in private sectors because auditors may gather data indicating the usefulness and utilization of resources in an organization. Although such findings may not affect the activities of the organization, the findings may help organizations in the private sector with solutions or answers in relation to implementing changes and projects in the company. Efficiency measures may help organizations in the private sector assess and evaluate its resources in relation to its employees, partners, market, products, distribution channels, and processes and operations. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Effectiveness – This core value is defined as an ends oriented concept that measures the degree to which predetermined goals and objectives for a particular activity or program are achieved ( 2003). Effectiveness is related to achieving the goals and objectives of an organization, and thus, also relevant and applicable to the private sector. Like the government, the organizations in the private sector also have goals and objectives to pursue and target. Because effectiveness is related to goal achievement, this element can be discussed in relevance to resources and the other means to attain goals, including skills. Superior skills and resources, taken together, represent the ability of the organization to do more and better. Superior skills are the distinctive capabilities of people in the organization that distinguish them from people in organizations ( 2003). The use and interaction of the two factors enable an organization to achieve and attain its short-term and long-term objectives. </li> </ul> Lastly, the concept of value for money auditing is relevant to private sectors in line with the implementation of the 4 Pillar Approach. The 4 Pillar Approach involves 1) making the project objectives clear; 2) applying the proper processes; 3) selecting the best available deal; and 4) challenging or ensuring the deal makes sense (2006). In auditing, this approach is applicable to the value for money concept because like public organizations, the private sector needs the implementation of such approach in order to effectively and efficiently assess and evaluate their resources and their entities. With this approach, auditing will be more organized and systematic for it follows a framework and guide that will enable auditors gather information and data more effectively. In addition, with such an approach, auditors would ensure that their roles of preventing irresponsible use and misuse of important information would be achieved.   Conclusion             Auditors play an important role in any organization, both in private and public sectors. This importance lies on the fact that auditors are able to protect and organize the relevant data in any organization. With this, their work and role must be given emphasis, including the approach that they can use to improve.      Credit:ivythesis.typepad.com

Audit Commission

Audit Commission Introduction Business organizations in both public and private sectors perform a variety of tasks and re...

Value for Money Audit Process

<div class="entry-body"> Value for Money Audit Process 1) Introduction Value for money auditing is a recent expansion in the scope of auditing. In the public sector, State Auditors were traditionally concerned with regularity of expenditure and compliance with laws, rules and regulations. They also reported to Parliament on the deficiencies in revenue collections and any wastage of public funds. In the early 1970s, the role of state auditors began to change dramatically. Changes began in USA, Canada and in several European countries. The elected representatives of the people started demanding information on the efficacy and the effectiveness of public expenditure. They expressed dissatisfaction with the traditional role of audit which focussed merely on regularity and compliance aspects. They wanted to know value for money being achieved from the expenditure of public funds. They expected greater accountability from public officials in the management of public funds. The state auditors tried to respond to this challenge and started value for money auditing. The value for money auditing is also referred to as performance auditing, comprehensive auditing, management auditing, efficiency auditing, etc. 2) Definition of Value for Money Auditing There is no universally accepted definition of value for money audit. The Canadian Comprehensive Auditing Foundation defines VFM auditing as “A comprehensive audit is an examination that provides an objective and constructive assessment of the extent to which: • Financial, human and physical resources are managed with due regard to economy, efficiency and effectiveness; and • Accountability relationships are served.” The United States General Accounting Office Auditing Standard defines VFM as, “performance audits include economy and efficiency and program audits. (a) Economy and efficiency audits include determining; i. whether the entity is acquiring, protecting and using its resources (such as personnel, property and space) economically and efficiently, ii. the causes of inefficiencies or uneconomical practices, and iii. Whether the entity has complied with laws and regulations concerning matters of economy and efficiency. (b) Program audits include determining; i. The extent to which the desired results or benefits established by the legislature or other authorizing body are being achieved, ii. The effectiveness of the organization, programs, activities or function, and iii. Whether the entity has complied with laws and regulations applicable to the program.” The definition used by the Auditor General of Pakistan is “an independent appraisal of an audit entity to determine the extent to which resources were managed with due regard to economy, efficiency and effectiveness and in conformity with applicable regulations, rules and procedures. While there are some differences in the definition of VFM auditing, it is clear from the above definitions that the core of value for money auditing is the framework of economy, efficiency and effectiveness. 2.1 Economy Economy may be defined as “minimizing the cost of resources used for an activity having regard to the appropriate quality”. Economy relates to all types of resources such as physical, financial, human and information. The question of economy is relevant to the acquisition of resources. Auditors try to determine whether the resources have been acquired in the right amount, at the right place, and the right time, of right kind and at the right cost. This by itself is not very easy. It presumes that there are standards available to judge whether considerations of economy were kept in view in acquiring resources. One example of a standard for economy is to accept the lowest open bid for buying an asset. But it is not so simple. It is common knowledge that this is not a fool-proof method. Bid-rigging is a practice known in almost all countries. The bidders join hands to suppress genuine competition and thus fool the system of open bidding. Therefore, the crude standard of accepting the lowest bid may not be sufficient. In this situation when we seek economy in relation to quantity, quality, place, time and cost, more comprehensive standards are required to assess weather economy was observed in acquiring the resources. 2.2 Efficiency Efficiency refers to the relationship of inputs and outputs. It is relevant to the use of resources. Examples of efficiency are: teacher-pupil ratio in a school and machine-hours to output ratio in a factory. An increase in output without a corresponding increase in input or getting the same output as before with a reduced input indicates an increase in efficiency. Efficiency is usually a matter internal to the organization. Efficiency does not directly affect the activities of organization’s environment, external to it. For example, in the case of a hospital, efficiency measures may measure the utilization of hospital beds, operation theatres or use of drugs, etc. However, such measures may not directly affect the quality of care or the state of disease or health in the community which the hospital is serving. Measuring efficiency presumes the existence of acceptable standards/criteria. It is often necessary for auditors to develop such standards/criteria if they do not exist. Therefore, auditors often have to work with the auditee management and other specialists to identify or develop efficiency standard/criteria. Even where standards/criteria exist auditors need to satisfy them that these standards/criteria continue to be relevant. Sometimes efficiency standards/criteria become outdated in changed circumstances but remain in use. For example, the standard of efficiency in an accounts office for processing payment claims may have been devised when computers were not in use. With the advent of computers, the time needed to process a payment claim may have undergone a change. The auditors need to remain vigilant to such changes before accepting the existing standards. It is relatively easier to measure efficiency in cases where the inputs and outputs are of a repetitive or mechanical nature. We can devise standards for measuring efficiency in such situations. As compared to this, it is quite difficult to measure efficiency where the inputs and outputs are non-repetitive. For example, it is easier to determine the efficiency of a power house in producing electricity as compared to measuring the efficiency of a doctor who is examining patients, each of whom may be unique. 2.3 Effectiveness Effectiveness has been defined as an ends oriented concept that measures the degree to which predetermined goals and objectives for a particular activity or program are achieved (the attainment of the right results from the usage of resources and organizational operations). Of all the meanings attached to the word effectiveness, probably the most common is related to the achievement of goals. Different authors, with different value systems have their own conceptions of effectiveness, but what brings them near one another is goal accomplishment or performance in meeting objectives. This is how legislative auditors have generally viewed effectiveness for their own work. Although, making goal accomplishment central to effectiveness gives it a clear focus, the problems and implications remain very substantial. The literature on effectiveness contains many studies that raise issues surrounding this particular perspective. Among the observations on this aspect are the following:- Goals are often ill-defined, complex, changing, and contradictory; • It is often unclear at what level or with respect to what units the attainment of goals should be measured; • More than one technology or strategy produces the same outcome; • Goal-based perspectives usually take into consideration the preferences of managers, not all constituencies; and • Goal-based definitions have failed to clarify distinctions between organizational effectiveness, managerial effectiveness and manager and subordinate behaviour and attitudes. The assessment of effectiveness is by far the most important contributor of an accountability regime and at the same time the most elusive. One reason may be that there is no single, high level, generally agreed- upon definition of effectiveness. In daily conversation, being effective describes the capacity or the ability to achieve results. Often, it goes beyond this capacity and being effective means having reached one’s goals, to be successful. The word may also be used to emphasize the impact of one’s efforts or actions. Frequently, it merely describes that capability is actually in use, or that a law or a rule is in force. In practice, when discussing organizations, the word effectiveness is typically modified by one of three terms: Program, operational and organizational. • Program effectiveness relates to the continuing relevance of a program, the attainment of its intended objectives, its impact, and its cost-effectiveness; • Operational effectiveness relates to the achievement of output targets, to the delivery systems for the goods and services produced and the cost-effectiveness of these systems; • Organizational effectiveness relates to the overall capability of the organization and the interactions among strategic planning, management structures and processes and human and financial resources all in relation to the mission and goals of the organization and the external environment. Some writers have refined the notion of effectiveness by making explicit the consideration of cost effectiveness, which is the attainment of the objectives at the least cost, at a lesser cost, or at least at a reasonable cost in relation to the value of the outcome. Some have also included intended and unintended results or outcome of a program as factors in the measurement of effectiveness. Others still, particularly program evaluators have included the assessment of the continued need for the program in their conception of effectiveness. They ask the question: are the reasons that gave rise to the program in the first place still valid today? How effectiveness is viewed will depend on who is looking for it. Different views may be taken by the electorate, specific constituencies, customers, governing bodies, managers and so on. Each view has validity in its own context. 2.3.1 Public Sector Reform The public sector reform is moving towards results that matters to the citizens. In many countries progress have been made in moving in this direction. In the case of managing for results and particular outcomes, a public officer’s control and supervision vary considerably in different situations. In some cases, a public officer may have significant control over outcomes. In other cases several officers may be given responsibility and authority for the management of resources to influence the achievement of intended outcomes. The programs and projects managed by the Government are intended to provide certain outcomes. • Employment creation • Healthier public • Better standard of living • Poverty alleviation Effective program/projects are those that make a difference in meeting these objectives. We can ascertain with some difficulties whether or not the above outcomes are occurring. But, it is more difficult to determine to what extent the specific program/project in question has made to the outcome. How much of the success or failure can be attributed to the program/project. What has been the contribution made by the program/project? Despite measurement difficulty, attribution is a problem that cannot be ignored when trying to assess Government programs/projects. There are many other factors at play in addition to the impact of particular programs. There are other Government actions or programs, social trends and economic factors can have impact on the outcomes. The Government and the public would like to know contribution to outcomes from a particular program. Without solving the measurement problem, it is difficult to demonstrate that a particular program is making a difference. 3) Selection of Projects/ Topics for VFM Audit Governments spend money on several program and projects. It is important that the money is spent to achieve the desired objectives with emphasis on 3 E’s. (economy, efficiency and effectiveness). Public Officers are responsible for ensuring, programs and projects are managed in a proper manner. Auditors are responsible for providing independent assistance to Parliament whether value for money has been received. Auditors, due to limitations on resources cannot afford to audit all programs and projects. Therefore, selection of individual projects for audit is a key judgement that an auditor must make. The auditors should focus on those audits with maximum value added in terms of improved accountability, economy, efficiency and effectiveness. National Evaluation Conference 2003, Session 1, Paper 3 Page 4 of 8 It is useful to rank VFM Projects/Topics subjectively against the following selection factors. • Overall estimated audit impact • Financial materiality • Risk to good management • Significance of program to the activities of the entity • Previous audit coverage • Auditability The factors to be considered for selection of a VFM audit alone will not enable us to select a project. Source from which we can obtain information and data on different projects /topics with respect to the various factors are given below. • Budget speech of the Finance Minister • Accounts and Reports of Government Ministries and Departments • Media Reports • Earlier evaluation reports • Agreements with Donor Agencies • Reports of Parliamentary Committees 4) Audit Objective and Scope The first step in planning of VFM audit is to define carefully the audit objectives. The statement of audit objectives should articulate what the audit is to accomplish. The objective of VFM audit may be to express an opinion on economy, efficiency and effectiveness of management. The auditor may set an objective of only reporting exceptions. Audit objectives are generally expressed in terms of what questions the auditor is expected to answer. Example – Results achieved Report on exceptions Focus on systems and procedures Focus on results 5) Audit Criteria Audit criteria are reasonable and attainable standards of performance against which economy, efficiency and effectiveness of activities can be assessed. If audit criteria are not set, there will be no basis for comparison and consequently no basis for arriving audit findings, conclusions and recommendations. In financial auditing, the auditors usually apply generally accepted auditing practices which evolve through practice and academic work. VFM auditing attempts to evaluate vast varieties of activities and functions and therefore, there are no generally accepted criteria. VFM auditors, therefore, operate in more difficult terrain than the financial auditors. 5.1 Types of audit criteria i.General criteria ii.Specific criteria General criteria General criteria are broad statement of acceptable and reasonable performance. For example the procedures in an organization may be cumbersome to be effective. In this case generally accepted management practices can be adopted as audit criteria. Specific criteria Specific criteria are more closely related to an entity’s objectives, programs, systems and controls. In highly specialized technical areas, auditors may require the assistance of technical experts. For technical projects this competence can be achieved through a team of auditors consisting of auditors and technical experts from different discipline. In VFM auditing auditors access the performance of a Program/Project against pre-determined expectations of performance or criteria. In order to be acceptable criteria must have certain characteristics as reliability, objectivity, usefulness, understandability, comparability, appropriate and acceptable. 6) Audit Evidence Audit evidence can be defined as information collected and used to support audit findings. INTOSAI Auditing Standards and ASOSAI Performance Auditing Guidelines state that evidence should be:- “Competent, relevant and sufficient to support the auditor’s judgement and the conclusions regarding the organization’s program, activity or function under audit”. Competent Conforms to facts Evidence from personal observation Documentary evidence Original documents Relevance Relationship to the audit objectives Sufficient Adequacy of evidence The quality of evidence The level of materiality Audit evidences usually fall into four types.

Value for Money Audit Process

Value for Money Audit Process 1) Introduction Value for money auditing is a recent expansion in the scope of auditing. In the p...

Auditor’s Changing World Essay

Auditor’s Changing World Introduction The intense competitive world of business should be assessed and therefore, it should be part of the improvement. The area of progress and development was adopted by the auditing authorities in whom in return, being affected the relationship of the auditors and their clients. But the most idea factor of making the improvement and changes being possible is to establish the most reliable report without any bias but with accuracy. Auditor’s Relationship Due to the raising of performance in professional world, the auditing world taken steps to improve the education, training, professionalism and relationship on their clients. As much as possible, the taken actions for improvement are in matter of their performance. The quality of performance of professional service is already recognized as a strategic, yet critical program. Planning to achieve the objective has begun in establishing standards for professional conduct. The plan represents the idea of the most comprehensive improvement program that is under the quality performance. The idea of creating the improvement is to measure the excellence of each auditor. Moreover, the changes revolve in the idea of making the performance turn into the proficiency level. One requirement is to expand the entry of proficiency in the area where an individual can learn the basic knowledge through a comprehensive education and expansion. The continuing professional education standards in accounting and auditing practices will result in the idea of improvement.   Other than that, there is an available review for the accounting and auditing standards that keeps the people being aligned in all the proficiency strategies to avoid being involved in all allegations and substandard of performance. The audit concerns and practice enables all the employees to be alert in the nature of their work. The people engaged in the business of accounting and auditing is subject under the watchful eyes and on the commitment in doing a quality performance. Factors that Affects the Changes The changes are implemented due to some important focus of improving some areas of auditing. The regulation or the regulatory environment is the most basic reason on making the changes being implemented. About the industry competition in delivering the right service and company objectives, the entire organization should be subjected for alignment. Organizations cannot shut their eyes in the changing economic views on business and therefore, the company goals and strategies are needed to be under some changes.   Another factor is dealing with the company or the organization. The control environment such as the management of the overall process and procedures should be center in one goal. The honesty and integrity of the organization in terms of making business reliable is the most specific and valuable idea to pursue the goal of improvement.  The organizational competence can be about the internal and external affairs. Internal competence happens in the times when the people usually find the ways to improve their capabilities and knowledge about their work. Meanwhile, the external competency is related in the working environment of the firm against the other firms. Many firms are viewing the competency on another as a competitive advantage and keeps to pursue their motives. Most of the firms values the systems and the human resource and treat the two factors as their main ingredients. Companies often give incentives or rewards, which depends on different forms and award it to the most valuable employee. The incentives and rewards are viewed by some business analyst as the most basic way to improve or boost the competency of the employees in terms of working conditions. On the other hand, the performance pressure is another way to establish focus on making their work preferences more centers on the company objective. Meanwhile, there is a small relevance in the managerial style and attitude of the organization in leading their people. There is also significant impact in terms of the technological concerns. The system, integration of data, and functions are part of the technology revolution on the business. And the organizational budget is the least factor that can contribute to the changes in auditing. Impact of Changes For sure, there are many related impact on the action for changes and more of it affects the issue on corporate governance. In addition, the ethics, values and company culture is being affected by the changes. The technological aspect is also affected which is firstly being part of one of the factors to promote changes. Since there are changes in updating, processing, and procuring of documents, the security features and accuracy are needed to be emphasized. The knowledge management is being part of the changes that can be in the matter of communication and human resource management. These are the answers to keep up with the pace of change in the system, competency, sufficiency in workforce and supervision.   Credit:ivythesis.typepad.com

Auditor’s Changing World Essay

Auditor’s Changing World Introduction The intense competitive world of business should be assessed and therefore, it should be part of ...