Auditing. The series of scandals caused a general crisis of confidence Essay

Auditing. The series of scandals ca officed a general crisis of confidence in the wholeness of the entire system of corporate accoun - Essay ExampleThereafter the author described financial scandals as those corporate scandals that involve misappropriation and misuse of money or economic resources. The chronicles of business history are filled with errors related to accounting, judgements, financial management and financial skulduggery. Over the last few decades unscrupulous entrepreneurs consume been heavily involved in financial scandals where they allegedly diverted funds from one stated use to a nonher, paid dividends out of borrowed money or capital, traded stocks on the basis of insider information as well as concealed vital information regarding those stocks, practiced creative account thereby altering the companys records so on and so forth. Auditing failure has been a major concern over the last deuce decades with case of Enron and WorldCom coming into the limelight. Acco rding to Tackett, Wolf and Claypool (2004), a severe distortion in the financial statements that has not been reported in the audit report can be termed as audit failure. Thus the tender has committed a serious mistake while conducting the auditing process (Arens, 2002). Normally, auditing failure would not happen if an auditor is abide by the Generally Accepted Auditing Standards despite the fact whether the financial statement is accurate or fair. ... Thirdly, auditing failure occurs when the auditor is lured into committing such frauds by the company. Lastly, auditing failure might occur if the audit officer may commit fraud intentionally because of having some private relationship with the client beyond a authorized level which is normally not expected in normal audit between independent parties. The sideline sections will highlight the integrity in the musical arrangement of Corporate Accountability thereby commenting on the habit of auditors and their effectiveness in th e auditing process. The issues which undermine the credibility of audit reports will also be discussed. Thereafter, the changes that have been make in the auditing regulation will be explained followed by an explanation of the corporate governance framework that exists in Parmalat. Henceforth, the issues of audit reporting will be discussed and appropriate conclusions will be drawn. Integrity in the System of Corporate Accountability Corporate accountability is of utmost importance in debates around complaisant issues, morals and businesses (Brenkert, 2004). Accountability generally refers to the reliability and authenticity in the financial accounts reporting related to the financial military position of any corporation. Integrity in the corporate accountability system should be maintained in arrangement to reduce fraudulent activity within the financial reporting system. In the latter half of the ordinal century, the social and environmental issues were also brought under the financial accountability making them responsible for the environmental and social records. Linkage between the accountability and the integration of the Corporate Social Responsibility within the businesses helped to take the affair for Social responsibility to greater heights. It