The Importance of Auditing for Effective Financial Reporting

Running head: GMP W7 Post
GMP W7 Post
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Authors’ Note

2
GMP W7 Post
Unfortunately, auditing is not necessary for effective financial reporting. Do you agree with
this statement?
As suggested by Rezaee et al., (2018), auditing can be illustrated as the process of assessment
of accounting documents of a business entity's accounting records, along with physical
scrutiny of its resources. In case if the same is executed by a certified public accountant (also
referred to as CPA), then the certified accountant can necessarily express an outlook regarding
fairness of financial statements of the business enterprise. In essence, this viewpoint is
thereafter issued together with the financial assertions to the entire investment community of
the firm (De Vlaminck & Sarens, 2015). So, when presented with the assertion that “auditing
is not necessary for effective financial reporting”, I would hereby like to express my
disagreement with this assertion. Further, main task of an assessor is to carry out
comprehensive evaluation of both in-flow as well as outward stream of cash, the entire
amounts that the business unit owes and overall worth of assets or else resources possessed
by the corporation. Also, assessors review and check the overall worth of assets of the
business concern at the time when assets were obtained, their optimal usage and fine points of
tax disbursement by the business concern (Rezaee et al., 2018). Therefore, in case if an
assessor fails to carry out the job effectually, outsiders such as financiers, creditors plus other
users of the financial information can lose faith and doubt authenticity of the overall financial
statements. Therefore, this is also imperative in luring financiers as well as lenders who bring
finances to the corporation for upcoming projects. Also, for a business concern to ascertain if
its processes are effectual, they need to ne analyse at a regular basis to make certain that the
results are what the corporation wants and needs to progress and acquire capital. De
Vlaminck & Sarens (2015) illustrates that the way management of the company is concerned
about overall integrity as well as reliability of the financial assertions designed by the system