Auditing in an Organization - Coursework Example

Field auditing standards require high quality and timely execution of audits. An auditor is required to plan the audit process. In this case, if the audit process had not been planned, it would not have been ready for presentation to the shareholders and other stakeholders. Shareholders should receive an audit report to determine the progress of the company.

After completion of the audit process, auditors are required to make an audit report giving an opinion on the financial statements of the organization. Additionally, the report is supposed to follow a given format, which includes a title, addressee, introduction, scope of the audit, opinion of the auditor, date, and the auditor general’s signature (Gomez, 2012). However, although the auditors of BP p.l.c made a report, they did not follow the required format. The report lacked the auditor general’s signature and the scope of the audit.

Although auditors owe a primary role of responsibility to the company under the contract they are engaged in, they should also exercise a duty of care to third parties. In light of this, an auditor should also provide dependable financial information to third parties. This aids the third parties to allocate their resources in the most appropriate way (Gomez, 2012). On the other hand, inaccurate and inappropriate reporting by an auditor may prevent a shareholder or a third party from investing his or her resources in the company. An auditor should provide the users of the audit information with the guarantee that the financial reports of the firm are dependable (Gomez, 2012). This being the case, BP’s audit report does not reassure the users of the report to rely on the financial information provided to make investment decisions. Therefore, I would not rely on the report too as it does not reassure me as a third party.

An audit report should give the auditor’s view of whether the fiscal reports offer a true and fair opinion that conforms to the financial reporting standards. Additionally, on the report, the auditor is required to indicate if he received all the explanations and information, which according to his unsurpassed understanding were essential for the audit (Gomez, 2012).  For a third party to invest in a company, he or she needs clarity on whether the organization’s profit and loss account and balance sheet shown in the report concur with the books of accounts of the company. The auditors were expected to give trustworthiness to the organization's financial reports. Credibility, in this case, implies that interested third parties can depend on the financial reports.

The auditing committee received £13 million for the audit of the company’s accounts and other services in the organization. They received this amount on completion of their auditing duties in the organization. An auditor is required to execute numerous duties and responsibilities for adequate completion of their tasks and roles.

Before remunerating the auditing committee, the company should ensure that all the duties and responsibilities of the auditors have been fulfilled adequately (Gomez, 2012). In this case, BP p.l.c should have ensured that the auditors have adequately fulfilled the requirements of their job specifications before receiving their payment. The company should have confirmed that the auditors made a report to the company, certify the company’s statutory report, verify the profit and loss account, and exercise a duty of reasonable care to the shareholders and other interested third parties. In this case, the auditors did not exercise their duties adequately and were only entitled to remunerations that best suited the work done. The audit did not give a fair and true view and the credibility of its financial reports. In my opinion, the work done by the auditors was not worth £13 million. Therefore, the audit did not represent a benefit worth the cost.