Analysis of the Auditing Report Purpose Essay Example | Topics and Well Written Essays - 1000 words

Analysis of the Auditing Report Purpose - Essay Example The essay "Analysis of the Auditing Report Purpose" overviews the main objectives and principles of accounting and the process of auditing that help an auditor in reporting the financial condition and working result of the organization. During auditing, the auditor may come across some errors and frauds although that is not the primary objective of the auditor. The auditor can also disclose whether the accounting system adopted by the company is efficient enough, during which time he may mention some several glitches in the system. The auditor has to examine books of accounts and any other relevant document so that they can report the financial condition of the firm. During the process, the auditor may come across some errors or frauds which can be in the form of clerical errors or errors of principle. Clerical errors can be divided into errors of commission, errors of omission, and compensating errors. Some frauds can be so damaging that they lead to the company bankruptcy. A good example is The Enron scandal that led to the bankruptcy of the corporation that was a result of audit failure. There are the following principles in auditing: planning, honesty, impartiality, secrecy, evidence, consistency and legal framework. The auditor has to plan before starting their work. The auditor decides to account about the internal control procedure and the accounting. Honesty and sincerity are the second most important principles of auditing. The auditor should exhibit a high degree of loyalty and professionalism.