Full width home advertisement

Featured Post

Serve To Lead 4 Change

The only constant in life is change, and the rate of change is increasing. With today's pace of change, there is an increasing nee...

Post Page Advertisement [Top]

Hi there. It's really been quite a while since I last posted, & I think I'd probably be doing it more often now. As most of you should already know, I've worked in the audit line for 6 years & it's definitely amazing. In this post, I'd like to share some insights of the professional so you may widen your horizon of knowledge & widen your options for a career path.

Most of you would already know, that there are the Big 4 + 2 firms in the audit practice. They are ranked as below (you may click on the URL below the image for a link to the website).





Kindly do note, that all these firms are international networks of practice which operate in the view of profits as separate entities in their own countries (e.g. US, UK, Malaysia).

Our work, as auditors (a.k.a. assurance providers) is with regard to the Financial Statements which comprise of the :

  1. Directors' Report
  2. Balance Sheet (a.k.a. Statement of Financial Position)
  3. Income Statement (a.k.a. Statement of Comprehensive Income)
  4. Cash Flow Statement (a.k.a. Statement of Cash Flows)
  5. Statement of Changes in Equity
  6. Notes to the Accounts

Our role is to ensure that the Financial Statements (subject matter) are properly drawn up in accordance with the relevant reporting standards (e.g. MFRS, IFRS). We have to ensure that the accounts show a true & fair view of the company.

True in this context, is referring to without fraud & factual.
Fair refers to the unbiased condition of the subject matter.

Our duty as auditors is to form an audit opinion of the company's financial statements based on the above and prepare an audit report. You may view financial statements and audit reports of various listed companies at their respective websites (look for investor information) or in the relevant stock exchange websites (e.g. Bursa Malaysia).

An example of what we do, referring to the Balance Sheet on Cash at Bank balances. Let's say, the amount of Fixed Deposits is RM668 ($160)m, we shall have to confirm this amount. But how?
  1. Sight and agree the amount to the bank statement.
  2. If figure agrees, send a bank letter to the bank.
  3. Receive the bank confirmation, & ensure amount is true & fair.
  4. Ensure proper disclosure of security placed for this amount is performed.
By taking these steps, the amount is definitely true & fair and therefore shows a clear view of the company's performance. Do note though, that our work is based on materiality, a concept developed for efficiency. Our work depends on the size of the client.

If the Profit before Tax figure is small, more work shall have to be done as a small Net Profit margin would mean that the shareholders would require more assurance of the figures, as a loss-making company is completely different than if compared to a moneymaking one.

Then, comes the quality control process where reviewing and leadership come to play. Here's positioning by ranking in a firm :
  1. Managing Partner / Chairman
  2. Partner
  3. Director
  4. Principal
  5. Senior Manager
  6. Manager
  7. Assistant Manager
  8. Supervisor
  9. Senior Associate
  10. Associate
  11. Junior Associate (Assistant)
Internal auditors are different than compared to external auditors. They work for company's with the NEDs (non-executive directors), ensuring internal controls are operating effectively. Paychecks are paid by the company itself and therefore an independence threat is apparent.

Hope you found this helpful. Happy auditing!

This article has been featured on ProspectsASEAN.com with permission.

13 comments:

theeggyolks said...

hmmm..pro!

Anonymous said...

Genial brief and this mail helped me alot in my college assignement. Thank you for your information.

Roshann Mathiahlagan said...

Glad it helped.

Daniel Milstein said...

That is so true. As an author and business man, I can relate to how you said "If the Profit before Tax figure is small, more work shall have to be done as a small Net Profit margin would mean that the shareholders would require more assurance of the figures, as a loss making company is completely different than if compared to a money making one". I hope more people discover your blog because you really know what you're talking about. Can't wait to read more from you!

Anonymous said...

You can parlaу youг particulaг skіlls anԁ interests intо а ѕpecialized
acсountіng field with some focusеd ѕtudу and eхperienсe.
Whіlе it сan be uѕеd fοr private companу audits aѕ well, publiс company audits requiгe а mоre сomprеhensіve
іncluѕiоn of eѵidencе anԁ testing.

Αlthough mеaѕures werе taken following the finanсial
sсandals to safeguaгԁ audіt inԁерenԁеnce,
by restricting the abilitу οf auditors to оffer othеr tуpes οf ѕeгvіcе tο their auԁit clients, thеse measurеs ωеre not equаlly strісt in all countries.



my ωeb blog ... http://www.xfire.com/blog/graig67o/4644687

Gregory Davis said...

I really enjoyed very much with this article here. Really it is an amazing article I had ever read. I hope it will help a lot for all. Thank you so much for this amazing posts and please keep update like this excellent article. thank you for sharing such a great blog with us.
accounting firms north vancouver

KGRNAccounting said...

I feel really happy to have seen your webpage and look forward to so many more entertaining times reading here. Thanks once more for all the details.list of audit firms in dubai

kompanyservices said...

It has been simply incredibly generous with you to provide openly what exactly many individuals would’ve marketed for an eBook to end up making some cash for their end, primarily given that you could have tried it in the event you wanted.tax fillings india

Faiza Mohammad said...

Nice blog, for professional accounting service in Dubai, I would recommend NR Doshi and Partners

SIyad said...


Nice Blog, Thanks for sharing

Audit firms in UAE
Today the organizations are constantly being tested to decrease the costs, the greater part of working uses and different prerequisites.

SIyad said...

Management Consultancy UAE
The executives is a procedure of arranging, dynamic, sorting out, driving, inspiration and controlling the HR, money related, physical and data assets of an association to every its objectives proficiently and viably.

SIyad said...

Accounting firms in UAE
Accounting is known as the language of business. It is extremely basic piece of an each business firms.

SIyad said...

VAT Consultants in UAE
About VAT the Value Added Tax was presented in the UAE on 1january 2018.

Bottom Ad [Post Page]