A true and fair view of the state of the company’s affairs? - or smoke and mirrors?

  

During the recent failures in the global financial system one group of participants have remained largely unscathed for their part in the train wreck, the Auditors.

Now a report published by the Association of Chartered Certified Accountants (ACCA) says the accountancy profession will continue to lose credibility if it fails to convince its stakeholders and the public of its value.
The ACCA said the industry must take steps to rebuild confidence in the accountancy profession after the report found that only 55% of the public trusted their members.

 

Essentially there are many instances of conflict of interest such as taking on consultancy work for Clients and becoming too cosy with management teams.

 

It is all too easy for companies to bully the young staffers sent in to do the grunt work .For example what chance has a newly appointed auditor walking around a factory warehouse to adequate value stock? In reality they have to rely on the company for “valuations” and this can result in a totally inaccurate picture being presented.

 

The validity of a company’s accounts reflects the integrity of the company which is being audited. As was demonstrated with the banking crisis in Spain an unrealistic valuation of the property portfolio either through deviousness or sheer incompetence will ultimately have ddisatrous consequences.