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The benefits of an audit

The benefits of an audit

I recently came across an excellent infographic that makes fascinating reading. Entitled the 10 Worst Accounting Scandals of all Time, it is a list of the corporations such as Enron, Lehman and the Bernard L Madoff Investment Securities LLC, AKA Bernie Madoff, which have become household names for all the wrong reasons. The great thing about this infographic, produced by accounting-degree.org, is the fact that not only does it show in a very concise and understandable way what happened, how they did it and the penalties inflicted upon them, but also how they got caught.

With Enron, it was an internal whistleblower. For Bernie Madoff, the end came when he told his sons about the scheme, and they reported him to the authorities. WorldCom's $3.8 billion fraud was uncovered by its own internal auditors.

How long would these vast corporations have carried on if someone inside the company, or in Madoff’s case, the family, hadn’t decided to do the right thing and expose the fraud? No-one knows, but steps have been taken to minimise the chances of other’s getting away with it.  Enhanced audit reports are now a requirement. It is now a requirement that auditors, including auditing committees, have to report on areas that have brought up any significant issues in the course of the audit.

In many cases, a pre-audit can highlight areas that could be problematic before they become 'significant issues'. 

The regulatory landscape has changed a lot in the past few years, and increased reporting requirements make it more important than ever to have a regular and intensive audit by auditors you can trust.

See the full infographic at http://www.accounting-degree.org/scandals/

Call us on 01628 631056 to find out more about the enhanced audit reports service we offer.

 

Before I go… are you sitting comfortably?

Since October 1st 2013, certain companies with year-ends on or after 30 September will need to prepare a strategic report to give a fuller picture of the company’s market position and the logic of its strategy and prospects. This, coupled with the enhanced audit reports and the usual directors and shareholder reports, are all designed to ‘tell your company’s story’. In other words, to provide investors and the public with a more complete picture of the company’s position.

Email us at simona@knightandcompany.co.uk for guidance on whether you need to prepare a strategic report for your company.