“Audit is more than just numbers. It’s about proving achievements and challenges, and helping to ensure a strong foundation for future aspirations”.
The purpose of the audit is to confirm the confidence of the users of the financial statements. Audits show where you stand and help inform your next steps. The core of the audit and its enduring mandate is to prove that the financial statements give a true and fair view in all material respects in accordance with the relevant financial reporting framework. The auditor is completely independent of the contractor company to be audited. Users of audited financial statements include creditors, shareholders, and other stakeholders.
An audit was once thought to be a straightforward administrative exercise that consisted mostly of validating the correctness of the accounting transactions recorded in the audited financial statements.
As the world changes, the auditor’s position has never been more crucial. Now auditors need to be considered allies in shaping standards that will provide comfort to stakeholders so they can build a foundation of strength for the future, supporting smart and confident decision-making.
They understand that the biggest challenge for some stakeholders is to understand the importance of audit quality itself because audit elements are often complex and difficult to measure. Most audits depend on the audit process and that process can be anything but visible to the client and even more so to the users of the financial statements.
According to the traditional view, audit quality is consistent across all audit firms, because audits are performed according to accepted auditing standards. However, many studies and subsequent practices challenge the traditional point of view, showing that quality also determines the price.
Quality means full commitment to making sound judgments. This means ensuring that all the right steps are taken consistently throughout the course of the Audit. This means providing a basis for confidence in the verified results. That is why quality performed audits help clients increase the reliability of reported financial statements and subsequently the possibility of obtaining loans from the most prestigious lending institutions and attracting potential partners for joint investment.
The true nature of a high-quality audit fundamentally varies over time, being an activity that evolves with the development of the day-to-day business environment, financial reporting standards, auditing standards, regulations, and technology. This means that the pursuit of audit quality is a never-ending endeavor and not a fixed objective with an end result.
Indeed, the sole indication of a possibly flawed audit is a review of the financial statements, a restatement of the opinion, or even a special regulator probe. However, these procedures can run for years and may have nothing to do with the actual health of the organization until then.
Several factors define or impact audit quality, according to recent research, notwithstanding the difficulty of measuring it. A relevant factor is the size of the professional audit firm; the bigger the service company, the higher the quality offered. Another confirming factor is the firm’s brand name; to further strengthen the brand name, audit firms attach great importance to audit quality. Another important factor for evaluating audit quality is the audit firm’s expertise in a particular industry, which is usually measured by market participation.
Working with a prestigious and professional audit firm has major advantages for the audited company. Leveraging a brand audit firm’s deep expertise in relevant industries will help create a stronger foundation on which decisions can be based and future actions taken, adding deeper and more authentic value for stakeholders.
Due to the auditor’s lack of experience and awareness, stakeholders may be unaware of the most recent financial issues impacting the industry in which they operate. Furthermore, rather than a lack of ineptitude or a lack of ambition, it is due to a lack of expertise, methods, and personnel to cope with varied sectors and business trends.
In summary, the audit firm’s brand and reputation, size, and industry experience are among the most important elements to consider when ensuring excellent audit quality.
Are you looking for dependable auditing services to improve your financial integrity? Accorp, the industry’s premier audit firm in Singapore, is here to help. For additional information, contact Accorp or visit their website. Don’t pass up this chance to build your financial foundation. Act immediately!
