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Problems Faced By Auditors Accounting Essay

The standard requirement of auditing requires auditors to conduct audits of the companies independently and without any interference from the concerned company. According to few surveys the auditors are usually hassled by the companies’ top management while the auditors are conducting the audit report of the concerned companies, the surveys have also reported that the auditors usually comprises their independence by providing clients with the consulting services like non-audit services, consultation on auditing reports and also on matters not associated with auditing. However this paper is basically about the problems faced by auditors while doing the audit of any company. The paper involves that how any management of the company places obstacles and hurdles for the auditors while doing auditing and also how and why the company management doesn’t support the audit program which makes the audit for the auditors pretty difficult to perform. (Spanneut, 2012)
There are various problems that are faced by the auditing companies while doing audits. The paper involves the problems faced by the famous auditing company KPMG while conducting
Problems Faced by Auditors
There are various problems that are faced by the auditing companies while doing audits. However, few of the basic problems that are faced by auditing companies are pointed out by famous auditing company KPMG. Some of those problems are discussed below: (heena Carmichael)
No Management Support First and the foremost problem faced by any auditing companies these days is insubordination between auditors and the management of the company for which the auditing needs to be done. According to many reports the company managers do not have the understanding of the importance of the company audit report. Hence, they do not cooperate much with the audit officers in order to provide them with complete information. According to ISO 19011 every executive team of a company needs to set an audit criteria but in most of the cases many executive teams of multinational companies fails to understand or read this important term as set by ISO 19011. Therefore, according to KPMG one of the basic step t overcome the problems created by the executive team of the company is to tell them the importance of the auditing through professionals. Furthermore it has now become the job of auditors to make the companies executive team understand the reasons for performing internal audits including all other types of audits. (Kieso, (2012).)
Auditing these days has become necessity of all the multinational companies but still many companies do not understand the importance of it being done through professionals. Many companies in order to save the company get the company’s auditing done through unprofessional that afterwards cost them a lot in means of money and loss. As per KPMG in order to improve the performance of auditing which usually gets affected by the insubordination of the executives of the company, the auditors’ needs to communicate with the executives as the communication the key to resolve many disputes. The communication can be in form of audit reports between both the units i.e. the auditors and the executives of the companies. Also auditors should try to encourage the working of the executives by re-emphasizing management’s role in the audit process.
Dealing with difficult audit KPMG being one of the best auditing firms encourages auditors to interact with the owner’s or executives of the company.So that the auditor will get better idea of auditing and will able to deal with difficult auditing easily.
No Audit Preparation Another problem that is faced by auditors is audit preparation. Every year auditors promised themselves that this year their audit reports will be better than the previous year but still the results remains the same. This problem occurs because of the audit is done at the last moments which causes lots of cause and the work is done under stress and deadlines. (Bragg, Bragg, S. M. (2011))
As we all know that the audit preparation is the most vital part of an audit program. So in order to address this issue an auditor must always keep tabs on time as the time has always been the key to success especially when it comes to auditing. One must schedule his time at least two weeks before the audit is to be done. Audits that are under stress and deadlines are often hazardous.
Internal Control It is another factor which has pointed out by famous auditing firms. According to these firms if auditors do not have an internal control then they will not be able to perform auditing of the company properly. It is the job of auditors to have an understanding of internal control as it is very important for the auditor and lies within the framework of the audit rules and regulations. It is further enunciated in the framework of audit rules and regulations that the auditor must see that internal control of has been properly designed and implemented. It all depends on auditors if they want to they can change modify or alternate the even the timings including the procedure of audit. However such changing’s shall be entirely based on the assessment of the internal control of auditor including the results that will come out from the internal court. For instance programs that are poorly and badly controlled have more chances failing and crippling, so auditors will need to focus their skill on such programs.
In addition to this auditors may get complete knowledge of internal control through different forms like inquiries, inspection, evaluations, monitoring by going through different document and records and by reviewing previous auditing records and reports. According to the report by KPMG different auditors or different audit firms use different types of methods depending upon the audit objectives and risk involved also the knowledge auditors have regarding the internal control gain.
Conclusion Hence as surveyed by famous auditing firm like KPMG it’s concluded that auditors to face problems created by executives of the company and which affects the performance of auditors. However these obstacles can be overcome by simply communicating and conveying with each other. With subordination of both the sides a good and flawless audit report can be prepared.

Why We Need Accounting Standards Accounting Essay

This essay talks about Accounting Standards which is important in financial. And it is interesting topic which discusses identified accounting standards which is important to each company. And it is analysis different things which relate with Accounting Standards as: International Accounting Standards (IAS), Accounting Standards Board (ASB), why we need accounting standards? , different accounting standards, and finally advantages and disadvantages of accounting standards
Accounting Standards are authoritative statements of how particular types of transaction and other events should be reflected in financial statements and accordingly compliance with accounting standards will normally be necessary for financial statements to give a true and fair view. [Aidan, (1971)]
In fact, Inflation accounting was only one part of a bigger move towards accounting standards. Standards had been proposed a few years earlier to limit the extent for judgment in the preparation of accounts.
International Accounting Standards (IAS) are lay down by the international Accounting Standards Board. Now these are compulsory for all European listed companies. The US market rejects IAS without reconciliation to US GAAP. UK non-listed companies still follow UK accounting standards. [Mellett, (1995)]
Accounting Standards Board The connection among the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) is one that can be increased continuously. These have same task which able to improve continuously and make rules to preparation financial reports.
Financial Accounting Standards Board (FASB) is considered one branch of the financial statements. This company based in Norwalk and Connecticut and its non-profit. In financial accounting, the (FASB) has responsibility for put principles of accounting for the private sector.
Why do we need accounting standards? Accounting is used in every type of business and organization from big multinational organizations to local shop, from traders and companies. It can cover an unlimited range of activities as different for example: charities, doctors, lawyers, mines, betting shops, banks, cinemas, circuses, farms, airlines, estate agents and so on.
People invest in organizations of all kinds and they would all like types have faith and trust in the figures reported in their financial statements. But this variety of kind of business, and of size, means that, while general principles can be laid down, detailed regulations that it would make sense to apply to one company would be unsuitable for another company. For example; impossible to provide 100% assurance of the validity of the financial statements of every conceivable organization through the creation of a single set of rules and procedures.
Accounting is very important to help the reader to arrive conclusion, and there are important set guidelines to take any thing relate to the accounting. These guidelines are called accounting policies. The intricacies of accounting policies allowed companies to change accounting principles for their benefit. This made it impossible to make comparisons. For example; Accounting Standards in India are issued by the Institute of Chartered Accountant of India (ICAI). At present there are 30 Accounting Standards issued by ICAI.
Different Accounting Standards Different accounting standers are a drag on improvement in much the same way as different languages are an inconvenience. Unlike creating a world language, crating one set of standards is achievable. Apart from the possible saving for companies with different international structure, complying with an internationally understood accounting paradigm opens up a wider investment audience. [Betsy Willis and Becky Jones, 1998]
Conceptual Framework The development of a coherent and consistent set of accounting principles which underpin the preparation and presentation of financial statements.
First- and fundamental importance- all involved in global financial reporting must have a common mission or objective. At the heart of that mission is a conceptual framework which must focus on the investor, provide decision-useful information, and assure that capital is allocated in a manner that achieves the lowest cost in our world markets.
A conceptual framework is an attempt to create a set of fundamental accounting principles which will help standard-setting. A major achievement of the search for a conceptual framework has been the emergence of the decision-making model. The essence of this is that the objective of financial statements is to provide financial information useful to a wide range of users for making economic decision. A second objective is to provide financial information for assessing the stewardship of managers. In order to be useful, this information must be relevant, reliable, comparable and understandable. Although there is general agreement on the essentials of a decision- making model, there is little consensus on which measurement model should underpin the decision-making process.
Conceptual Framework []
Advantages of Accounting Standards: Accounting standards is keeping track of transaction
It be used to predict cash flow and maintain a budget and for revenue expected
It has facilities for offer uniform reports to financial statement
It is useful to investors and to foreign groups to evaluate the development of another investment in different companies in different countries
Standards helps accountant to contact with their customers through the offer set of laws of authority to which the accountants can appeal
It is use to regulate the different accounting policies and practices with a view to eliminate to the scope possible the non-comparability of financial statements
Disadvantages of Accounting Standards: An unfavorable condition or circumstance.
Something that places one in an unfavorable condition or circumstance.
Damage or loss, especially to reputation or finances; detriment.
Conclusion Accounting standards is important for any company in the world. It is help companies to know how much is loss or gain monthly and yearly. So its must be careful when do its account to be all thing correct. It is necessary to keeps a budget and revenue for the company. Also it is important in accounting standards show framework of any project the company will does such as know the objective of financial statement, Underlying assumptions…etc. Also it considers an attempt to create group of accounting principles which help to put standards.