A true view of the company’s affairs – or smoke and mirrors?

 

Following the fallout from major losses suffered by various financial institutions the role of auditors is coming under scrutiny as never before. Hitherto they had remained largely unscathed for their part in the recent train wrecks.

The Association of Chartered Certified Accountants (ACCA) has acknowledged that the accountancy profession will continue to lose credibility if it fails to convince its stakeholders and the public of its value.

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. Not wishing to rock the boat, there is a reliance of the company being audited 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 recently demonstrated by Tesco “booking profits” not yet realised such activities either through deviousness or sheer incompetence will ultimately have disastrous consequences.