Audited Statements

The following are some of the constraints, obstacles affecting our reporting and analysis:

1. TIME:  The time given for conducting statutory audit is very less every company wants to disclose its financial results at the earliest. The auditor was forced to complete his job within the stipulated time which is not possible since it may require some more time to obtain clarifications, information, material, evidence etc.Therefore it is better in delink the audit with the financial results of the company,the rectification’s required if any may be done during the year in which the audit is conducted i.e. without effecting or distributing the financial results declared by the company.Also the person incharge at the organization for finalizing the financial results has to be made more accountable than the statutory auditor.It is better if a member of our institute should be appointed compulsory as the head of the finance department.
2. APPOINTED BY THE MANAGEMENT:  The management of the company makes All our auditing appointments for this reason also we are unable to exercise our qualitative reporting since it may effect the very same management which appointed us as auditors.Therefore it is advisable to appoint auditors on empanelment bases for carrying any type of audit as done in case of branch audits of banks.The result will be that the management will be more cautious in finalizing the financial statements and they will not be in a position to impress the auditor who appointed through empanelment. No management person will know who is going to be appointed as the auditors of the company also our member cannot know which company/organization is going to audit.Also the appointment by the management does not seems to be fair due to the reasons that the loss occurred to the organization is not the loss only to share holders or management but also it will effect to the following areas: 
   1. Waste of resources
   2. Loss to creditors, financial institutions
   3. Loss to customers, disributors, dealers
   4. Loss to employees due to loss of employment
   5. Loss to suppliers of raw materials
   6. Loss to government as low tax collection
   7. Loss to industry as a whole
   8. Loss to image and goodwill of the group
   9. Loss to investor’s confidence at large on corporate sector
   10. Loss to net wealth of the company
   11. Loss to productivity
   12. Loss to quality
   13. Loss to development as a whole
        
3. VOLUME OF WORK:  The large quantity of records and information to be verified by an auditor within a specified time also leads to over looking of some areas.Therefore it is advisable to separate or distribute the total audit into number of assignments so as to get audited without much difficulty by an individual member.This step results into completion of audits on uniform basis without much trouble of high volume of work to an individual member.
   Also one more auditor will be appointed for the organization of a company as a whole who will co-relate the work done by individual members and give his report. These appointments should also be on empanelment basis.
4. BUSINESS KNOWLEDGE:  The member appointed, as the person who got professional knowledge of the business or the organization should in variably assist auditor.This step helps to give suitable advises, plugging the loop holes in the administration of the company this is also leads to reporting not only with regarding financial statements, but also the activity of the company which may result into improve their efficiency and earn more profits.The reports given by the statutory audits with the help of professionals who are appointed independently will give true and correct guidance to the management.
5. DUAL RELATIONSHIP:  Our members are acting as auditors as well as consultants for tax matters,  labour  laws etc.,. Also the management is appointing a person who can carry on all the activities.
   Since the auditing is more in the nature of finding the irregularities with the administrative system it is advisable to appoint a third person as an auditor on empanelment basis. This step results into clear cut pointing of defects in the administrative system with fair and free opinion.Also the auditor appointed should not be allowed to serve the organization in any other capacity.Also our members can act as consultants for maintenance of accounts, preparation and finalization of financial statements in addition to act as consultant for taxation and other matter i.e., except acting as statutory auditor. This step also gives another way of professional opportunity to the members of our Institute.
6. RETAINER SHIP: Our member can also act as an auditor for one organization and as consultant to his own clientele i.e., he cannot act as auditor as well as consultant for the same organization.The reason being the auditor should be an independent and third person to give true and fair report on the financial statements of the organization.At present the member is acting as an auditor as well as consultant. This is making the member more and more embarrassing since the assignment of auditing is reporting on the financial results disclosed where he has provided consultancy service.
7. QUALITY:  Quality also likely to be effected since time is short and volume is more. Also no time to verify the internal management, internal control etc.…Only statutory audit reports are made public and made responsible not concerning with the internal management which is defective and beyond the control of the statutory auditor.It is advisable to standardize and made compulsory the procedures and systems of the internal management of the company. In other words the companies’ internal management should be held responsible for non-compliance.
8. NO BARRIERS:  Every member has to be allowed to carry on the profession as a consultant without any restrictions of appointing incharges, branches, correspondence with clients etc., from the Institute.Since the audit assignment bifurcated and allotted on empanelment basis, our member will be in equal position with other consultants. Hence there need not be any restrictions on the place, clients, persons, etc., for carrying on the consultancy assignment.However the member should be allowed only to take the help of other professionals in regarding his consultancy services.
9. RELATIONSHIP: The relationship between client and consultant must be based on the mutual confidence between them but not restrictions imposed.
10.  ADVISORY: Our member will be in a position to act as advisor to the client in every matter based on his knowledge and experience in the field of accounts and management.This will help to give more service to the client.Businessmen require advice at every level of his activity with regarding accounts, taxation and legal matters, which can be provided as advisor.
11. INFORMATION: At present the business man faces competition requires a lot of information with regarding the industry, Govt. policies, commercial competition with regarding raw materials, sales, exports possibility, cost reduction, waste management, and all other areas which our member can provide and become part of the development of the client.This step also gives lot of scope to our fellow members for utilizing their expert knowledge for the development of their clientele. At present many of businessman requires information in various aspects, which are covered during the period of articleship and profession.For the reasons above said I feel that the auditing assignment should be separated and allotted on empanelment basis only. And consultancy service is provided to the clientele to the members with expert knowledge in various commercial areas will create new avenues to the members and success of the clients.