Financial Auditing: Objectives, Society, and Regulations

This assignment delves into the realm of financial auditing, commencing with an explanation of audits and their core objectives. It elucidates the process of evaluating financial data and records to ascertain an organization's overall financial standing. The assignment then critically evaluates the contribution of financial statements to society, highlighting how accurate data facilitates decision-making and investment. It discusses the benefits of auditing, such as increased opportunities and better utilization of accounting information, while also acknowledging potential disadvantages. Furthermore, the assignment explores whether increased regulation can improve the quality of auditing, arguing that more regulations enhance the growth and safety of financial data. It references specific regulatory changes and legislative steps aimed at protecting investors and stakeholders. Overall, the assignment offers a comprehensive analysis of financial auditing's objectives, societal impact, and the influence of regulations.

Q1: Explanation about audit and its objectives
Audit: It is known as a systematic as well as crucial evaluation of financial data, statutory
records and vouchers of an organisation in order to ascertain about the overall position of the
company. It can be conducts at internal level by employees of the firm to determine the financial
condition or the availability of the cash within an organization.
Objectives:
The objective of the audit is to express an opinion meaning that the person conducting the
audit to obtain reasonable assurance but not an absolute level of assurance on whether the
financial statements are prepared free from material misstatements as a whole, in all material
respect this could be either due to fraud or error, in that way this will enable the auditor to be
able to express its own opinion based on the financial statements and in confirming those opinion
with the financial reporting frame work to asses that the financial statements are fairly presented
and to give a true and fair view of the financial statements. However, reasonable assurance is not
a 100% guarantee that the financial statements are free from material misstatements in other
words; auditing is persuasive rather than conclusive.
Risk that the auditor’s opinion can be wrong
There is various specific kind of situation in which an auditor’s opinion can be wrong. Some of
them are:
 Unqualified opinion: It is a kind of opinion in which an auditor report that can be issued
when an auditor examine that each of the financial record are free from
misrepresentation.
 Qualified opinion: It occurs in that condition in which financial record has not been
maintained as per the GAAP but no any misrepresentation has been identified.
 Adverse opinion: This seems to be worst types of financial report that can be issues to a
business is an adverse opinion.
Q2: Critical evaluation of the contribution that financial statements make to society
The main objective of accounting is to determine accurate data to the society so that
chances of getting sufficient amount of results can be more. This information is then further be
used to make decision regarding how to control and manage business or make necessary
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investment in the business. There are various aspects that can be more valuable for the society in
terms of auditing. It will provide necessary benefits to them. Such as
 Increase chances of new opportunity in terms of making their valuable contribution in
increase their own growth.
 Better utilisation of accounting information so that future decision can be made in more
effective and easy ways.
Disadvantage:
Sometime, because of inaccurate information chances of attaining future benefits can be
reduced. This will lead to increase maximum burden on the society and data is shown wrongly in
the financial statements.
It is very true that audit must be essential aspects which will contribute more to the
community through creating latest job opportunity to the skilled people. Accounting information
can become more valuable for them that can make them to invest more in the companies.
Q3: Can increased regulation improve the quality of auditing
Accounting to my perception, it is essential for every financial institution to make more
plan or strategies to secure their transaction that are done on regular basis. It is true, that with the
increase in the regulation the quality of auditing can also be improve. I have analysed that more
the regulation the growth and safety of financial data can be more in near future time. The
financial conduct body has issued proposed changes to audit committee that need for the
companies with proper securities which would be admitted to trading on an EEA regulation. The
audit tendering procedure for public enterprises and regulatory role of the financial reporting
council are set to make changes so that better results can be attained in near future time. I have
also analysed that government of UK is making more steps on the legislation in coming few
months to protect the interest of the investors or other stakeholders. The competition and market
authority had implemented new reforms of audit market in the UK through which chances of
misrepresentation can be avoided in coming period of time. I think that, because of new
amendments most of the companies can easily be able to protect their data and other valuable
documents that are crucial for the company.
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