Auditors in the Business World - 1642 Words

Accounting is the process of identifying, recording, and communicating the economic events of an organization to interested users to make sound decisions. In accounting identifying economic events involves selecting the economic activities related to a particular organization such as paying out salaries to employees of a particular entity. In turn, once these economic activities have been identified they are recorded in the books daily into a systematic system measured in dollars. These economic events are then classified and summarized by an accounting system. The data gathered from the economic events are then translated into financial statements and communicated to internal and external users interested in the economic health of the†¦show more content†¦SOX considered one of the most important bills passed by law to this day, established the Public Company Accounting Oversight Board (PCAOB), which is overseen and monitored by the Securities and Exchange Commission (SE C). â€Å"The PCAOB provides oversight for auditors of public companies, establishes auditing and quality control standards for public company audits and performs inspections of the quality controls at (CPA) firms performing those audits† (Arens, et al, 2010). The SEC ensures that PCAOB performs accordingly with overseeing, examining, regulating and penalizing auditors of publicly traded companies. As a result it validates an auditor’s opinion on an audit report because it give creditability and reliability to the information that is audited. Auditing is defined as the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria (Arens, Elder, Beasley, 2010). In order to perform an audit there has to be information in which there is a form to validate and a criteria an auditor has to adhere to in order to evaluate any information whether it be financial statements, federal income tax returns, the efficiency of accounting systems, and proficiency of business operations. Obviously the criteria for evaluating information varyShow MoreRelatedThe Importance Of Auditor Independence On An Audit1473 Words   |  6 Pages Why is it important for external auditors to be independent? Relate your answer to the primary role of external auditors. Give examples of specific ways the lack of auditor independence may impact adversely on an audit. Auditing is one of the most essential processes that has to be executed in the business world. It involves independent testing on the documents of a business to establish the financial statements are prepared without any material misstatements and maintained as the law requiresRead MoreEthical Codes Of Conduct Are Secondary Thoughts1531 Words   |  7 Pagesconsidering accounting and ethics, the implications of poor performance has the potential to affect many different classes of stakeholders. Contemplating auditors, solely, raises the ethics issue to a whole different level in that he or she is responsible for assessing the viability of a business’ financial wherewithal. To that end, an auditor must gain an understanding of the company, its operations, financials and any known fraud committed; become familiar with its internal controls; evaluateRead MoreCareer Research : Quality Engineer1339 Words   |  6 PagesCareer Research: Quality Engineer/ Auditor In every industry there has always been a need for precision and quality, and from that need there has risen a profession to make sure that the high standards of precision and quality are efficiently met. This profession requires advanced schooling, a specific skill set and the mindset of anything worth doing, is worth doing right. It is a challenging profession, but those who follow through will reap the benefits. This profession is called auditing andRead MoreThe Importance Of Accounting As Well As Ethics1442 Words   |  6 PagesFollow up to the Interviews I am very fortunate to have been able to interview three business owners that I come in contact with almost daily from working at a golf course. 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Relate Your Answer to the Primary Role of External Auditors. Give Examples of Specific Ways the Lack of Auditor Independence May Impact Adversely on an Audit.1648 Words   |  7 PagesTopic: Why is it important for external auditors to be independent? Relate your answer to the primary role of external auditors. Give examples of specific ways the lack of auditor independence may impact adversely on an audit. In 2001, there was an event that had shaken the whole business world. The crash of Enron in US, followed by worldwide collapse of its auditor, Arthur Andersen. It was a greatest corporate failure uncovered in business history. Follow the Enron-Andersen scandalRead MoreEssay about External Auditors Must be Independent1154 Words   |  5 Pageswas the September 11 event which was considered the worst terrorist attack that has happened in U.S. history, killing a total of 2, 977 people. And not long after that, in the business world, on December 2, the greatest corporate failure was exposed. 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