Accounting Assignment Essay writing help online review analysis:: Audit Practices in Australia
Question Topic?? Write about the audit Practices in Australia??
Solution Proposed::
Introduction
Financial audit is the main process through which we can understand the true capacity and the profit and loss of a company. Companies would be claiming anything but it would be mainly ascertained as and when the auditors of the company claim it. These are mainly Chartered Accountants who have done well in their respective areas and fields and are now making sure that companies also bring out the truth out of them. Off late, Audit practices have taken a hit with a lot of companies using their money power to influence the decisions of the auditors and thus making sure that auditors speak only those things which they want to speak. This is nowadays most common in the rest of the world and the true valuation of the company is not brought out in front of the people. We have to thus make sure that such kinds of practices are brought down and truth comes out in the open so that investors of the company are safe and they also be a part of profit of the company.
Auditing in Australia
Auditing or financial auditing in Australia is mainly governed by Australian Securities and Investment Commission and they are the apex institutes who govern the financial audit industry and device the frameworks for companies working in Australia. The main role of ASIC is to regulate company and financial services laws in Australia and buildup a good frameworks for companies. The main areas of responsibilities for ASIC are corporate governance, financial audit, insurance, consumer protection, securities and derivatives etc. These are the main areas of operation for the company and they set rules and regulations for smooth functioning of the company.
Financial Audit system is mainly governed by a lot of rules and regulations in terms of how to prepare ledger accounts and how to device the balance sheets of companies. We also have to see the bank reconciliation so that there is no problem for the companies and the banks. Another major thing that is being seen is how to prepare the audit reports of different companies. This can mainly be done with the help of good accounting standards. Australian government mainly ensures that there is good accounting standards that are been followed and the companies are able to bring out the true picture of the government and the industry and thus bring out full faith in consumer sentiments.
ASIC and Financial Reporting Council Responsibilities
Financial Reporting council’s main responsibility in Australia is to bring out the truth in accounting standards in Australia. It is only with the help of them and ASIC that corporate have a good sign of relief and they can work under a given set of guidelines. The main role of ASIC is to regulate company and financial services laws in Australia and buildup a good frameworks for companies. The main areas of responsibilities for ASIC are corporate governance, financial audit, insurance, consumer protection, securities and derivatives etc. These are the main areas of operation for the company and they set rules and regulations for smooth functioning of the company.
Financial reporting council’s main responsibility in Australia is to protect the Insurance industry and other industries which are mainly associated with it and make sure that neither the industry nor other people who are associated with it are at loss. Medical insurance industry every year suffers a great amount of loss each and every year and this can only be stopped with the intervention of good financial reporting councils. Apart from it, there are the derivatives and securities industry which needs to be introspected and their brokerage and other financial terms are being viewed from time to time and definite course of framework is being developed for them.
Malpractices in Auditing Industry
We all know that the biggest persons who break the laws are the persons who mainly make these laws. Thus, this principle is also common in the Audit industry as well. Lot of malpractices go hand in hand every day and the main players who do this are the persons who are directly involved with the auditing firm. The main malpractices that are been carried out is wrong representation of facts and figures in Audit sheets. If a company is mainly going in profits, the auditors put these facts as disproportionate assets and thus they are been carried out for losses of previous years.
Another major malpractice that is being carried out is moving out profits for future expansion plans. A lot of Audit people create such things so that there is less profits that are being declared and thus less profits for the company and thus less taxes. Auditors also help in creating fake bills for the companies and this mainly helps them in reducing upon the taxes for the company. Such kinds of malpractices are very common in the current scenarios and the government has to ensure that such kinds of practices are being seen and identified and strict actions are being taken against them.
Measures to be taken
The main measures that can be taken so that such kinds of activities are being reduced is to appoint a senior level people who are able to have a direct view on the company’s accounts. They are not with the auditors and they are an independent body. Also when the balance sheets are being open in the public, people have to read and study it well so that they are able to understand the flaws if any and make sure that it is being brought into the notice of the government. It is only with the help of these types of laws that audit companies would be doing less malpractice and they would be practicing things that are true. A watchdog has to be appointed by the government which can at any point of time visit the company and bring out the records of the company. It is only by this way that malpractices can be checked and their would be more accountability in the hands of the consumers and the industry.
Conclusion
We now understand as to what all are the main things that make up an Australian Auditing Industry and what all are the practices that are being followed up in the industry. Australian auditing industry is one of the topmost audit industries in the world and also has been recognized by the main Audit firm from America. Off late due to a some malpractices in the industry, their has been some dent that has occurred in the industry but still the Australian government and the ASIC has taken enough remedial steps so that such practices are not followed in the industry. People also have shown enough strength and support and their has been a sea of changes that has taken place which has brought to light the positivity’s of the auditing firms.
Thus, we can now say that Australian Audit industry is working hard so that truth comes out in the open and true financial records are being placed in front of the public and the government. The Corporations Legislation Amendment bill has been brought to good effect in order to bring the quality and transparency in the audit process and Australia regulatory framework is in best practices act as far as International standards are being concerned.
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