Letter to BS: The audited documents and reports must maintain quality

This refers to “A raw deal for auditors" (June 28). Auditors’ report and comments have significant value to the investors, lenders, creditors of the business organisation, the regulators, taxmen and to the government. The frauds in banks and other business entities point that the authorities of those institutions exploited the vulnerabilities and intentionally committed fraud for monetary gains.

Albeit the system of inspection and oversight in vogue, fraud and embezzlement are not uncommon. It indicates that either the management failed to enforce supervision or colluded with the fraudsters. Keeping aside the auditing, if auditorsgo for investigations to unearth the criminal conspiracies, they will fail to submit the audited financial statements and report well within the specified time. They have a defined objective and accordingly, they have to audit the books of accounts and ensure that the organisation have complied with the norms of accounting and book-keeping and the business policies of the entity. Any violation, deviation from the norms in force, suspicious transactions, and loophole in the system and procedure must find a place in the audit report. The audit report must maintain quality. The audited documents and reports are meant for the regulators and the stakeholders to enable them to take decisions on investment and other related matters.

The quitting of auditorsfrom the audit work of many business entities exposes the unwillingness of the promoter or the management to provide information, data and clarification because of the fear of detecting violations of norms and regulations. However, such actions have adversely affected the investors manifold. Failure of the auditing team in detecting the conspiracy of the promoter or the management doesn't mean that the auditorsare co-conspirators.

Letters can be mailed, faxed or e-mailed to: Nehru House, 4 Bahadur Shah Zafar Marg New Delhi 110 002 Fax: (011) 23720201 · E-mail: letters@bsmail.in

Source: Business-standard.com

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