Essay: Auditing Principles and Practices
In efforts to ensure we, auditors, provide valuable services to clients, we go through client records to check for the following:
- The records are reasonable enough giving details of all the transactions carried out by the client,
- Find out whether the transactions carried out correspond with the financial statements prepared with keen reference to the GAAP (Generally Accepted Accounting Principles) while still paying attentions to the receipts and invoices provided by the firm’s accountants,
- The firm played all precautionary measures to prevent any chances of misappropriation, frauds and any accounting errors.
In efforts to ensure that the services provided to clients meet the professional standards, a close reference is carried out on the existing accounting standards. More so, professional accountants are employed to carry this noble task. The employment of these competent personnel goes along with the standards set up by the accounting principles. In addition, the standards set up by the GAAP requires the auditors to check for any loop hole in the accounting system and evaluate for any misallocation of resources. The auditors needs to further advice the clients according about the internal means of control and any change that needs to be made to upgrade the internal control mechanisms. Where there is any case of embezzlement of funds, they must ensure that this is reported to the management and the root source of the misappropriation identified.
Since the main agenda for the auditors is to evaluate the financial records, they must ensure the financial audits reports that they offer to clients are satisfactory. In order to give satisfactory results they must follow the guidelines as stipulated by the accounting principles along with the Public Company Accounting Oversight Board standards. For any auditor to be successful, the auditing firm must give recommendations to its clients about the internal control measures. These measures ensure that the client improves its internal control mechanisms.