Talk:Financial audit

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[edit] Financial audit article

I am currently reading Perks, R.W.(1993): Accounting and Society. Chapman & Hall (London); ISBN 0412473305 with a view to updating the article Financial Audit. Let me know if you are reading an academic book or journal about this topic too by posting a message here or at the talk page of the Accountancy task force. --Gavin Collins 11:17, 30 July 2007 (UTC)

[edit] Possible sources for references and verification

Here are some online possible sources for references and verification of this article:

-- • • • Blue Pixel 01:29, 5 August 2007 (UTC)

Thanks! I will have a look later this week. --Gavin Collins 21:56, 6 August 2007 (UTC)

[edit] Article overlap and emphasis on auditing profession

This article, audit, and Big Four auditors seem to all emphasize the financial auditing profession and its organizations rather than the process of financial auditing. I think it would help Wiki readers if we make it clear here that financial audits on small organizations and local governments do not necessarily directly involve GAAP guidelines or require extensive training. Financial audits of small businesses, small non-profits, and small governmental entities often follow simple rules and merely require a solid understanding of double-entry bookkeeping, common sense, and strong cooperation with the business, local government or non-profit bookkeepers to correct and improve the financial record-keeping and reporting if needed.

If you can download the Auditor's Guide from http://www.newpa.com/default.aspx?id=132 maybe you can see an example of what I mean. That's a guide for local government elected auditors in Pennsylvania, USA. Local auditors are not certified auditors, they're elected auditors. Many financial auditors for small businesses, small non-profits and small governmental entities are not professionally certified financial auditors, but they check the financial records and make corrections and suggest improvements to internal controls. This is not rocket science. While professionally certified auditors are needed for large and complex organizations, a very large number of small organizations rely on less complex financial auditing processes to check the accuracy of their bookkeeping and financial reports.

Financial auditing is a SERVICE. Certain organizations, such as publicly held companies in the USA are required by the SEC to hire external, certified auditors. Most small organizations (gov or non-gov) are not required to use the services of certified professional auditors, and would not be able to justfy the expense of their services.

I think this article should stick to the topic of what a financial audit entails -- first for a tiny organization, then for a more complex organization. The issue of auditor certification for public companies is a side issue -- and an indirect sales plug for certifying organizations. I highly respect the certification standards of many accounting organizations, but their training standards to not apply to a vast majority of effective small organization financial audits.

Regarding potential COI on my part, I'm an elected auditor in a small municipality in Pennsylvania, I used to work for one of the Big Four accounting firms, and was also recently the Treasurer (bookkeeper) for a small local non-profit organization -- which was audited by a non-certified auditor, from whom I received extremely constructive criticism that helped everyone involved.

I'd really like to see more international information on this topic. I don't know much about other countries' standards and procedures for financial audits. -- • • • Blue Pixel 01:38, 10 August 2007 (UTC)

How has this article managed to not mention International Standards of Auditing despite being about financial audits?! AnthonyUK 12:00, 2 November 2007 (UTC)
I agree it should be mentioned. But if you want to make it a primary focus of the article, I wouldn't like to see that happen. ISA standards apply to a very limited number of financial audits. The majority of financial audits are small and local, with less complex rules than ISA uses. ISA is for large public companies. Companies or taxpayers themselves pay for audit services. In the case of small companies and small juristictions, ISA is, frankly, overkill. We're not here to advertise ISA. I doubt many local auditors have ever heard of it. Mention it, yes. Plug it, no. That's just my perspective :) -- • • • Blue Pixel 00:27, 11 November 2007 (UTC)
Related to your comment when audits do not involve GAAP guidelines and extensive training, could you please clarify on that matter? With respect to your small NPO, what were the financials audited against, if not some form of generally accepted criteria, or criteria required by legislation. My understanding is that the financial audit process involves three parties (1) management, (2) the auditor, (3) the end users of the financials. Management is accountable to the users, and reports through the use of financials. Management provides assertions to the auditors in respect of allowing the auditors to express an opinion to the users based on management's compliance with some sort of criteria. Without some form of criteria being put forward, an audit would not have any focus. Fraudy talk 04:35, 2 June 2008 (UTC)

[edit] UK 'jurisdictions'

I have removed the reference to the Audit Commission auditing 'UK government expenditure'.

The Audit Commission operates in England only. I considered adding the analogous bodies (Audit Scotland, Wales Audit Office and Northern Ireland Audit Office) but felt this would only to make the article hard to read, and so deleted the Commission. The actual situation is complex and I expect that most readers would be happy to know that the principal auditor, auditing monies voted by Westminster to Whitehall departments, is the NAO. —Preceding unsigned comment added by Billo72 (talk • contribs) 10:08, 14 December 2007 (UTC)