Statutory Auditing of Books and Accounts - Report

   

Added on  2020-07-23

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Auditing
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TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1Why do think Mr. Medcraft made the above statement? Discuss..........................................1Purpose and the audit reports issued for Satyam and extent to which audit report served thepurpose it purports..................................................................................................................2Role of the company management and auditors fostering ethical behaviour, common good andstewardship in relation to Satyam...........................................................................................4CONCLUSION................................................................................................................................5REFERENCES................................................................................................................................7
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INTRODUCTIONAuditing is the process of examination of an organisation's financial statements, recordsand books in order to demonstrate if they are accurate in accordance with any applicable rules(involving accepted accounting standards), regulations and laws (William, Glover and Prawitt,2016). The main purpose of statutory auditing of books and accounts is to deliver an independentopinion to the shareholders on the trust and fairness of the complete financial statements whetherthey have been formulated in accordance with the companies act and reports by exception to theshareholders and other major requirements of company law. Present report is based on analysisof statements which is provided Mr. Medcraft, retired chairman of ASIC. Further, analysis ofSatyam (India) company case is also accomplished to provide understanding about the purposeand audit reports issued for organisation. At last, roles of company's management and auditors infostering ethical behaviour, stewardship and common good are also discussed by analysing thecase of Satyam.MAIN BODYWhy do think Mr. Medcraft made the above statement? Discuss.Auditors play a critical role in ensuring that the Australian investors will be confident andinformed by organisation when making their financial investment decisions. Moreover, highquality of audit supports the quality of financial statements and enable investors to rely upon theindependent assessment of financial reports (Hayes, Wallage and Gortemaker, 2014). Fromseveral years, there are various deviations have found in that Auditors reports related to someorganisations. Some auditors have assured the misleading financial statements and accounts oforganisations. Huge Window dressing was found in company's financial statements and auditorshave provided their assurance for their financial benefits. In the above statement, Mr, Medcraft has provided their concern about the level of trustthat shareholders can have in financial statements that are meant to be assured by auditors. Theyhave point out the risk which community from unethical behaviour of auditors by taking exampleof ENRON case. Statement was made to provide information to government about the threat thatAustralia could face due to misleading financial statements provided by organisation and assuredby auditors. They need to provide an understanding that the poor auditing of corporate accountswill lead to financial crisis in the future for country. 1
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