Question

Unfortunately, auditing is not necessary for effective financial reporting. Do you agree with this statement? In 300 words, defend your position.

Answer 1

Answer: I do not agree with that statement.

Explanation: Auditing is a term used to describe the various processes and activities put in place to review, examine and verify the financial reports and statements of an organisation. When effectively implemented, it has the advantage of ensuring the following.

I. Improved quality of financial statements

II. Reduced chances for fraudulent activities.

III. Proper documentation and reporting of daily Transactions.

IV. Improved monitoring and evaluation of the financial activities of an organisation.

V. It is a statutory requirements and obligation for Business Organisations.

VI. It will help to make the financial records of an organisation to be more accessible and transparent.

Many organisations have continued to Implement periodic audits and make it part of their processes, system and policy as it has benefited them and helped them to comply with statutory regulations and obligations.