Efficient Auditing System And Its Importance In Corporate Objectives

Stakeholder Map of Australia and New Zealand Banking Group Limited

Corporate objectives are only pursued effectively if an efficient auditing system is present within the company. Business processes r simulation of various internal controls which necessarily facilitate the supervision as well as monitoring accounting activities as well as prevent and detect irregular financial transactions measuring ongoing business performance and maintaining adequate records financial activities, engagement activities as well as operational activities that are related to the organization. This designs improvement in pinning accounting system towards tracking any materialistic irregularities and all thorough investigation from managerial point of view for ensuring obtainment of warranted circumstances that have greater financial credibility and business feasibility (Simetinger. 2018). The paper delves into this aspects auditing and assurance feeding the circumstances that can hamper organizational performance in the long run.

Australia and New Zealand banking group Limited is one of the ASX listed company that includes suppliers, media, government, customers, employees, public organizations, etc. as the major shareholders of the company. The company is commonly known as ANZ and is considered to be the third largest bank due to its market capitalization throughout Australia after the Commonwealth Bank and the Westpac banking corporation. The stakeholder map of the company can be incorporated as follows:

The company focuses account building relationship through trust, respect of all the stakeholders over the long term period. The company purpose to build a sustainability Framework when the key priority areas are included of objectives to provide commercial as well as retail banking and financial services do not get obstructed. Revealing credible financial information where the trustworthiness demonstrate as well as legal the confidence within shareholders by engaging them in the policies process as well as operation of the firm (Schmidt, Wood and Grabski. 2016). The engagement of all employees as shareholders the structural approach to which periodic identification and prioritization usage of effective financial information is being implemented. Moreover, to clarify the ownership and managing shareholders relationship regulatory protocols regarding the ongoing review of shareholders involvement with the organization. Moreover it is been found related to the issues that effective configuration for long-term strategic decisions are avoided by the accounting principles and auditing standards then it becomes creditworthy for the investors as well as other financial entities that gets allied with the organization. Annual reports financial statements includes this key issues that releases how much responsiveness is existing from the company’s end towards is shareholders. Analysis renders and effective arrangement of the auditing process and assurance. Starting from the chief information Officer, financial officer project manager, change manager, developers, customers, suppliers, etc. the shareholders power interest Matrix can be shown as follows:

Whistleblowing: Its Purpose and Importance

Strong stakeholder relationship is essential for ensuring the success of any organization and create long term value. ANZ also focuses on the same by me the responsiveness towards the stakeholders as well as shareholders by engaging themselves within a transparent exchange of financial information.

The notion of whistleblowing to the kind of person exposes any kind of information or activity which seem to be illegal or unethical from the point of view of an organization since it tries to keep its information private which are required and public which is necessary. In case of accounting information there are number laws that exist in order to protect the whistleblowers. The whistleblowing Act was published in 1998 in the form of public interest disclosure act that was implemented in order to protect individuals who has authority to disclose information in order to fulfill public interest and as a consequence do not destroy them with falsified information that is colloquially referred as whistleblowing (Soh and Martinov?Bennie. 2018). The whistleblower decides to reveal the misconduct of a company which is typically misconduct involved in fraud or corruption for intentionally perpetuating or earning financial profit. There exist a disc with the whistleblowers as a retaliation activity that an organization pimples on the whistleblower family War for reporting illegal mission of exercising the legal rights which is only the sole authority of the organization itself. Give me face any kind of wrongful termination and in order to protect that the whistleblowing act is been implemented. The purpose of whistleblowing is not to encourage corruption or any kind of fraudulence but to ensure that are unethical behavior within the workplace is being restricted. One of the key component in any workplace is its business ethics and organizational behavior. Maintaining integrity between the two is the honest way of doing business. The process of whistleblowing tends to encourage ethical business practice and implement transparency of financial information as well as executing functionality of an organization for which to meet is objective get fulfilled (Simnett, Carson and Vanstraelen. 2016). There are various types of whistleblowing among which two are most important. What is the way a whistleblower report for misconduct of another person to the organization and second type is external kind of whistleblowing where the whistleblower reports is conduct of a person outside organization which may be the media or the law enforcements. Whistleblowing a person’s which are basically employees or former employees that have deported from the organization and whose reports are about illegal or fraudulent activity by an employer. Thus whistleblowing relates itself with the public interest requirements as mentioned in the APES 110 code of business ethics for making the professional accountant documents where they take under consideration the activities of all the stakeholder’s of an organization which may be the employers, government and organization itself. They risk mitigation from their employers by making such reports and raising voice against the political of illegal business affairs through which the corporate is progressing without the knowledge of the shareholders and other stakeholders that comprises of the customers employees government, investors, etc. This gives rise to the state and Federal protection which should be given to the whistleblowers

Types of Whistleblowing

. Basically Enron was an electric company that majorly involved in business. It has been found that the growth of revenue earning by Enron surprisingly increased drastically from the year 1995 to 2000. The shareholders use to become more interested about the increasing money by the company and eager to invest for the company due to its rapid growth (Pratt and Peters. 2017). The investor in the stock market who previously invested in Enron were majorly gamblers rather than strong speculators. The database of stock prices from 2000 to 2002 Review that the stock prices of shares in case of Enron welcome to go down. All the investors who invested in the company previously reinvested there and hence the stock prices when the gradually year after year. This was nearly making the investment double from the previous investment as the found that the accounting figures were notably very high as per the financial reports of the company (Louwers et al. 2015). However, true scenario you was different as the company try to maintain a brand image of it that used to last for a period of 20 years. Do company use accounting cheats in order to showcase their counting figures very high which kept the investors interested for the company to invest as they found that there is possibility of substantial growth based on the trend analysis of the company’s past financial performance.. After the investigation by the government about the true facts and figures the understood that the company is cheating the investors and doing business to organizational malpractice of revealing wrong financial information and supporting unethical business practice as well as operational activities. After this the auditing firm Arthur Anderson got collapsed as well as Enron. The trick that was applied by Enron was to believe in a process of revenue generation that was hypothetical and didn’t even existed and reframing their financial reports according the forecast for perceptive idea that the revenue generation will take place in the future and we’ll meet the mislead insured statements till date (Knechel and Salterio. 2016). Thus they will get the chance to improvise the financial information accounting figures as per necessity though which did not take place in reality. For example Sheron Watkins was the plane spoken student of Enron. Sheron revealed that the trick which was implemented by not focusing the actual financial performance of the company whether suppressing them and revealing just a kind of figure which will do not allow the interest of the investors and other stakeholders to fall. The actual scenario from what was being represented. Enron thought that the company a major contract that was made in order to aqua advanced technology and deploy their production services with higher efficiency in near future based on that the forecast in that the revenue will be (Knechel. 2016). At a certain level which will be able to meet the financial figures that were represented currently. Moreover, in non-restricted in the financial statements based on the expectation of the business deal that the need for better revenue generation up to their unachieved target level. This was not disclosed all reports where the figures were kept monotonically increasing state in order to keep the faith of the investors upon the company. They manipulated the financial figures in order to expectations of the investors do not at the cost of the risk that the company’s undertaking realize that it will be made within a period of time if the technological business deal get successfully accomplished (Kend and Basioudis. 2018). Before the collapse of Enron Sheron Watkins revealed by sharing buttons that there is necessity for the organization to be transparent towards investors and come clean about their potentially disastrous that the app line in designing falsified financial data or accounting information. The whistleblowers should open good independent legal advice not lose their site of their own moral compass till they are with the organization. Moreover, they should take time in order to collect proper clues that can become substantial facts at the time of investigation since they are credible as well as feasible information (Griffiths. 2016). In that case the illegal behavior of activities by an organization will get suspected for its whistle blowing. Finally, the whistleblower should find out a journalist with whom he or she can reveal the true facts and figures and in return there should be existence of mutual trust and understanding between the whistleblower and the journalist since they are taking risk for doing something good for an organization as well as their stakeholders (Gu, Simunic and Stein. 2017). As per the federal false claims act the anonymity of the whistleblower should not be kept secret rather lot of time till the government investigates about the case their identity will be kept anonymous. After the whistleblower reveals that true secret of illegal practice and analytical behavior by an organization and the challenge remind that how a government can investigate the case without revealing the secrets of the whistleblower and verify the realistic scenario that the whistleblower tried to convey. Paying payment rights act 1996 incorporates that if an employee blow the whistle then we should receive protection for do not getting victimized for dismissed subject to certain detriment because of their whistleblowing (Gist et al. 2015). It may happen that the whistleblower me lose sudden statutory protection if the comic about an offence while making the disclosure about the financial anomalies for operational element is on any kind of managerial anomalies that they think that organization is doing executive unethically followed by increasing malpractice of organizational culture.

Enron Scandal: Cheating Investors by Falsifying Financial Data

It is to be incorporated in this case the auditor’s didn’t revealed the true accounting information and financial figures for which the audit quality was very low. The accounting information that were being represented within the annual reports of the company where these were mere numbers only however the actual facts and figures of their financial performance was not accounted and if accounted the auditor’s used to suppress them and maintained a wrong figure which will keep the expectations of the investors high. The firm underground did the true exchange of financial and nonfinancial benefits audited there reports with Arthur Anderson which was an auditing firm open form PWC, Deloitte, Ernst and young as well as KPMG (Eaton et al. 2017). The managerial people those who were involved in this case were Ken Lay and Jeff Skilling who was the CEO of the company when the company was processing itself through this kind of fraudulent activity. Degree the people who got benefited through this fraudulent activity by Arthur Andersen as well as Enron the senior or qualities of the business firm in the company’s share and sold out the stocks right before the massive drop in the stock prices. Investors who got suffered due to such kind of in ROMs action encompasses goes to where the employees of the firm and trusted upon the activities of the palm just based on their financial report and the auditing done by Arthur Andersen (Chambers and Odar. 2015). Due to sudden closure of the palm the investors who are proportionately from the cross section of the com bankrupt the stocks of the company just close the download slopes by depriving common people. The notion is very clear from the side of a known that it was trying to just create an impression in the investor’s mind so that they do not get discouraged while investing in Enron (Barr-Pulliam, Brown-Liburd and Sanderson. 2017). Over the years people used to analyses the past trend of an organization and based on that day create an adaptive hypothesis which guides them towards making an investment decision this is in the past performance reveals the future trends any company. So investors actually worked from the point of rationality however the trick in the accounting information that was used by Enron to just disguise their original performance and describe the people who trusted upon the company unethically and illegally. It is found that the people who were previously aware about such situation just sold their stock before The Fall of the stock prices however the people who trusted about the past tense of the company didn’t even before the stock before The Fall of the stock prices and got busy all the deprived due to the action of Enron and its auditing authority of Arthur Andersen (Averhals et al. 2018). To improve the audit quality it is important that the firms should not influence the external auditor as well as their privacy and importance should be given for fulfilling public interest and any kind of production under which illegal or unethical business practices can be encouraged for earning higher profits. There should be provision permitted for individual or details based on the policy statements while getting the details for carrying out audit that should not get impaired. It can be said that the Independence policy statement allows to integrate internal and external audit in a way where qualification of all the applications align with the services that are being audited should be relevant to the authorities involved in the process. Committee responsible for the nomination of the external auditors as well as reviewing the quality and scope of to which the services provided by the established business organizations are effectively live with the policies of Audit and is in accordance with the external auditors independence. It is important to ensure that the Independence is not include as well as pre approval from the originals committees for each and every assignment (Ashcraft et al. 2017). Thus approval is required from Audit and Risk Committee (ARCs) for properly sorted business practices within the codes of ethics for professional Accountants as per the APES 110 code. Audit engagement partnership provide declaration in written form regarding the sections that are used and the companies not found to be in contravention with the independence of the orbitals requirement as well as codes of conduct half yearly review as well as the full year audit (Ahmed Haji and Anifowose. 2016). Each and every audited effectively communicated places in order to establish proper relation between the firms that are sorted out and organized by the firms as per the opinion of the auditor’s. All partners and employees of the audit firms should not be immediate family members of the form that is being audited help in providing any on guaranteed business within the process of audit as well as will take care of mutual financial interest from the side of the firm as well as from the side of the public.

Conclusion

It can be concluded that there is high necessity to eradicate the possibility of any kind of financial malpractice that hinders public interest and social welfare rather encourages corruptions through practice  of unethical or illegal accounting figures through incorporation of misconduct of business ethics and biased business objectives towards only acquiring profit. The principal external auditors should not be affected by any kind of conflicts as well as the policies applied by them to the services rendered by the organization for the stakeholders and it would be examined, whether role of Management is within the boundaries of professional expertise. There should be presence of no corruption whether the fees for the details will be arranged in a form of contingency fee, success fee or commission towards the auditors from the side of the firm. There will be rotational change in the partners while the auditing activities takes place career and related to complaints properly advice and services should be at assigned order to reduce biasness of any kind of probabilistic chance for illegal or unethical business practices each and every opinion from bauxite should be given highest priority in order to fulfill public interest and maintenance of transparent accounting information in the annual reports through the development of quality audit service.

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