Nobody downloaded yet

Auditing Committee - Essay Example

Comments (0) Cite this document
Summary
Introduction The last 15 years have witnessed some drastic changes in Corporate Governance across the companies of the world. One of the prominent features has been the incorporation of various corporate governance regulations and norms in various countries: Australia (BCA, 1991), UK (Cadbury Committee, 1992; CISCO; 1993; Hampel Committee, 1998; Turnbull, 1999) and US (NCFFR, 1987; Public Oversight Board, 1993, Sarbanes-Oxley, 2002)…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93% of users find it useful
Auditing Committee
Read TextPreview

Extract of sample "Auditing Committee"

Download file to see previous pages Audit Committees Introduction An audit committee can be defined as a committee that generally comprise of non-executive directors and is responsible for liaising between the board of directors and the external auditors (Parker, 1992). The responsibilities of audit committee encompass matters related to audits, financial reporting and internal control (Spira, 1998). Because of the importance of audit committees, major stock exchanges across the world such as US, UK, Canada, India, France, Australia, Honk Kong, Japan and Germany have given significant importance as a part of their listing requirements. Audit committees started from the US and percolated to other countries of the world. Audit committee of an organization is expected to perform the following activities: Make recommendations in the area of external auditor to the Board of Directors. These include selecting the external auditor, deciding the audit fees, renew/terminate the contract with the external auditor, decide the scope of work done by external auditor and other liaising activities between the external auditor and BoD. ...
r major contributions that an audit committee can make to the corporate governance of an organization are (Cobb, 1993): Reduction of board liability Establishing a link between the external auditor and the board Reduction of illegal activity and Proper representation of the financial statements Besides these, audit committees also reduce the agency cost of an organization. This is achieved by reduction in the information asymmetries between executive and non-executive directors (Eichenseher and Shields, 1985; Pincus et al., 1989). Audit committees also lead to reduction in the legal liability of the directors. Audit committees also help the process of corporate governance by: enabling BoD to meet their responsibility; improving auditor independence (Bradbury, 1990); and strengthening the role of non-executive directors (Porter and Gendall, 1998). Audit committees ensure that the external audit has performed its job well. At the same time they are also responsible for ensuring the reliability of the internal audit processes. This aspect of the audit committee will strengthen the overall audit process and positively impact the corporate governance of the organization. Audit committees also lead to generation of wealth for shareholders. This is based on the premise that non-executive directors are more likely to act in the interest of the shareholders (Rosentein and Wyatt, 1990). Limitations of audit committees Although audit committees play a very pivotal role in managing the corporate governance of an organization, there are certain areas which do not fall under the preview of the committee. An audit committee is not responsible to plan and conduct audits. At the same time, an audit committee is not responsible to determine if the company’s financial statements are ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Auditing Committee Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.org/environmental-studies/1405684-auditing-committee
(Auditing Committee Essay Example | Topics and Well Written Essays - 1000 Words)
https://studentshare.org/environmental-studies/1405684-auditing-committee.
“Auditing Committee Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/environmental-studies/1405684-auditing-committee.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Auditing Committee

Auditing

...?AUDITING Table of Contents Introduction 3 Globalisation 3 Effects of Globalisation on Accounting and Auditing 4 Auditors and Auditees 5 Driving Factors 6 Changes in Audit Process 7 Conclusion 8 References 9 Bibliography 12 Introduction The term “globalisation” has become the most discussed buzzword among the academicians, politicians and economists in recent times. Various driving factors and inherent benefits for different companies are proving to be incentives for the organisations towards enhanced financial globalisation. The growing interdependence of developed economies on developing and emerging economies is contributing towards increased globalisation (Hamilton & Quinlan, 2008,...
7 Pages(1750 words)Essay

Audit Committee

...? Internal Control Framework Question What is Audit Ethics? Define and explain the Independence and External Part of Audit Committee? Answer: The Code of Ethics states the ideology and potential leading the actions of folks and organizations in the ways of internal auditing. It describes the least provisions for conduct, and behavioural prospect relatively than precise actions. The idea of system of moral values is towards encouraging the moral traditions inside a career of internal auditing. Internal auditing is an autonomous, intention pledge, a consult action considered towards inserting importance as well as progress the organization...
7 Pages(1750 words)Essay

Auditing

...?Auditing 300 i. Confidentiality, professional competency, due care, professional behaviour and integrity are some of the fundamental audit principles (Wild, Shaw and Chiappetta 2011, 811). These are standards that an audit member must adhere to in order to uphold integrity in the profession. In the above problem, Bob has breached the confidentiality principle; this is an ethical principle and legal obligation of discretion which require non disclosure of information except to the client and audit committee about the findings or any material uncovered during the course of audit. This is unless permission is granted by the client for such discloser (Boritz 2004, 29). However, the above principle can be violated in the following... ...
3 Pages(750 words)Essay

Auditing

... Process: Principles, Practice and Cases. London: Thomson Learning, 2007. Print. Puttick, George, and Sandy Van Esch. The Principles and Practice of Auditing. Lansdowne [South Africa: Juta, 2007. Print. Ruppel, Warren. Not-for-profit Audit Committee Best Practices. Hoboken: John Wiley & Sons, 2006. Print. Welytok, Jill G. Sarbanes-oxley for Dummies. Hoboken, NJ: Wiley Pub, 2008. Print.... Management Letter When an auditor addresses a letter to a client, it is called a management letter. The content of this letter is the conclusions drawn by the certified public accountant concerning the accounting procedures and policies of a company, its internal policies, as well as the internal controls. The current system is evaluated, and its flaws are...
3 Pages(750 words)Essay

Auditing

...Auditing Stagecoach Company is among the leading transport companies in the United Kingdom. The company is a quoted company and that means that it has to publish its financial reports on an annual basis. The reports are usually published so that the stakeholders of the company can use them. The stakeholders include the shareholders, government, and the employees of the company. In the preparation of the audited report, the auditor has to be aware of the risk areas that can be changed to make the financial statements of the company look more appealing to the stakeholders of the company (Emerson, 212).The risk areas include the following, 1. Overstating of revenues and the understating of expenses Revenues...
7 Pages(1750 words)Case Study

Auditing

...could not be readily accepted.6 c) Since the return generated by the firm is remarkable in comparison to the sales made in the initial period of the company does not support the reason to not tally the accounts on the grounds that the amount was immaterial with no further calculations required. Auditing is mainly done even for the minute transactions taking place so as to tap the forgery of the respective company. Thus the reason for rising profitability based on the sales presently generated needs to be audited properly.7 Bibliography “Audit and Risk Committee Charter”. WHL Energy Limited. Accessed August 14, 2012....
4 Pages(1000 words)Essay

Committee Memo

...John Carlisle, President Cc: Richard Bartocelli, Vice President, Department of Research and Development Chair of New Product Committee Date: October 24, 2012 Subject: Status of Lexivia Project This is to update you regarding the latest status of Lexivia project. In the last monthly meeting, held on October 3, two major facts came to light that might delay the project. William Song, our outside patent attorney had informed that the drug composition of Lexivia and its potential use as heart medication was revealed in an article written by one of the company’s scientists in Journal of Experimental Pharmacology in April 2009 issue. Article was written before patent application was filed. The issue needs to be investigated...
1 Pages(250 words)Assignment

Auditing

...Table of Contents Audit Risks 2 Group Accounts 2 Foreign Currency 3 Intangible Assets 3 Provisions 4 Taxation 4 Intangible Assets: Increased Risks and Audit Procedures 5 Valuation 5 Impairment 6 References 8 Audit Risks The audit of the company Mobile Streams Plc. is followed by risks as the nature of the business tends to increase the risks. With the increased risk as per the operations of the company there are risks involved for the auditors where the auditors shall not be able to discover the material misstatements in the financial statements whether intentional or non-intentional (Philip & Michael, 2007). The risks involved in the audit of this company is analyzed and elaborated. The analysis of the management assertions... to what the...
8 Pages(2000 words)Essay

Auditing

...Auditing Part A 054 words Part B: 778 words March 27, Introduction The audit process entails determining whether the Havelock Europa Plc financial reports are true or correct (Havelock Europa, 2013). Untrue and incorrect financial reports include erroneous financial statement amounts (Arens, 2011). Errors are unintentionally misstatements are due to human errors. On the other hand, fraudulent financial statements include figures that were intentionally inserted by one or more company employees, possibly conniving with the external auditors. The research delves on the five areas of heightened audit risk. Auditing must prioritize auditing financial...
8 Pages(2000 words)Assignment

Auditing

...Corse 21 February “The Smartest Guys in the Room” Documentary the important individuals, their job and their responsibilities? A) Kenneth Lay - Lay is described as the founder of Enron and Arthur Anderson accountancy and audit firm. B) Jeffrey Skilling - Jeffrey was the manager in charge of human resource. As the manager in charge of human resource, his role involved creation of staff executives. However, he utilized poor financial reporting, special purpose entities, and accounting loopholes to hide dollars that amounted to billions, which originated from failed projects and deals. C) Andrew Fastow - He was the chief financial officer who with other executives misled the top management as the audit...
3 Pages(750 words)Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Auditing Committee for FREE!

Contact Us