When auditing is mentioned, what comes first to your mind? Do you visualize a businessman or a tax payer getting an unexpected visit from an auditor as if trying to uncover their secret procedures in the least way they expect it?
While there had been instances when entities were punished due to illegal practices, and auditors contributed in exposing it, in reality, auditing is not punitive in nature. Auditing is conducted to seek the opinion of an expert regarding the accuracy and fairness of the financial statements.
Its purpose is to protect shareholders and potential investors and creditors. Directors manage companies on behalf of its shareholders and to check their accountability it is a must for them to prepare and present financial statements. Directors hire auditors to examine these reports and enhance its credibility.
It's worth noting though that the views expressed by the auditor is neither precise nor absolute considering that it is a combination of procedures involving verification and analysis. Auditors draw their opinions based on the disclosed figures on the financial statements, as well as on the collected evidence, materiality level, scope and coverage.
An auditor therefore cannot be held accountable for any mistakes committed during the preparation of the financial statements. An audit report is also not an assurance of an entity's effectiveness and efficiency, nor it can be a guarantee of the entity's future viability.
But stil, shareholders and other important stakeholders put great importance on these reports. For one, users of these reports know that these are prepared by experts that are not involved in the preparation of the statements. For another thing, it can identify management deficiencies and its possible consequences as well as provide ideas on how such issues can be dealt with.
Auditors and audit firms in Singapore, like in other cities, are regulated to ensure that they deliver work in high standards and at the same time maintain the reputation of the accountancy profession. It's a must for every audit firm in Singapore to train their staff according to the Singapore Standard on Auditing and hire only registered auditors. Should complaints arise against an auditor, or accounting services Singapore businesses deal with, the ACRA can only accept complaints against those registered with the authorities.
While there had been instances when entities were punished due to illegal practices, and auditors contributed in exposing it, in reality, auditing is not punitive in nature. Auditing is conducted to seek the opinion of an expert regarding the accuracy and fairness of the financial statements.
Its purpose is to protect shareholders and potential investors and creditors. Directors manage companies on behalf of its shareholders and to check their accountability it is a must for them to prepare and present financial statements. Directors hire auditors to examine these reports and enhance its credibility.
It's worth noting though that the views expressed by the auditor is neither precise nor absolute considering that it is a combination of procedures involving verification and analysis. Auditors draw their opinions based on the disclosed figures on the financial statements, as well as on the collected evidence, materiality level, scope and coverage.
An auditor therefore cannot be held accountable for any mistakes committed during the preparation of the financial statements. An audit report is also not an assurance of an entity's effectiveness and efficiency, nor it can be a guarantee of the entity's future viability.
But stil, shareholders and other important stakeholders put great importance on these reports. For one, users of these reports know that these are prepared by experts that are not involved in the preparation of the statements. For another thing, it can identify management deficiencies and its possible consequences as well as provide ideas on how such issues can be dealt with.
Auditors and audit firms in Singapore, like in other cities, are regulated to ensure that they deliver work in high standards and at the same time maintain the reputation of the accountancy profession. It's a must for every audit firm in Singapore to train their staff according to the Singapore Standard on Auditing and hire only registered auditors. Should complaints arise against an auditor, or accounting services Singapore businesses deal with, the ACRA can only accept complaints against those registered with the authorities.
No comments:
Post a Comment