Analyze and evaluate the system of internal control in the process of implementing the audit of financial statements for business entities

Analyze and evaluate the system of internal control in the process of implementing the audit of financial statements for business entities

Pece , Nikoloski

Accounting is the process of recording, classifying, summarizing and reporting results from financial transactions in the form of financial statements. Other than accounting, auditing the financial statements determines whether those statements are prepared in accordance with generally accepted accounting standards. You could say that this kind of audit users of financial statements provides objective and independent opinion on the truthfulness and honesty of the data presented in financial statements of business entities that are clients. The application of the system of internal control in the implementation of the audit process is very important activity in the process of making business decisions to allocate economic resources and successful management. Information obtained from the analysis answer the question as business entity in the previous period and how to function in the next period to be maintained better result. The main goal of any business entity is achieving greater profits. The profit maximization is striving to achieve the possible cost less and also the achievement of greater revenues. Profit shown in the financial statements may differ from reality depending on the way you handled the financial statements or in other words the way reports display where they can be concealed large gains and losses. From there the auditors are those who weigh the reality of participants' data in financial reports. How the financial result is a real set, so will be better and better decisions are made based on such information. The advantages of better financial reporting are significant, hence the actions needed to achieve those benefits are complex and comprehensive. As such we list the following activities: improving the framework of financial reporting; strengthening of key factors within the financial reporting; supporting the audit profession; supporting education, training and public awareness. The main and primary objective of financial reporting is to provide access balanced between financial reporting and audit requirements, which means meeting the needs of different users of financial information but also will be complex to burden the functioning of the corporate sector. In practice, here are three main reasons to perform the process of analyzing financial statements and financial indicators achieved: 1. The need for continuous monitoring of their own situation analyzes achieved financial indicators, financial instruments are planned and implemented financial control; 2. Calculation and analysis of financial indicators of business partners with whom the business entity enters into a variety of business relationships; 3. When investing in securities to thoroughly check the solvency of the issuer of the securities or of potential investors to provide all relevant information for making decisions about investing in capital to protect against possible speculative things. Keywords: Accounting, system, Analyze, process, financial statements , Information, financial reporting

Conference or Workshop Item
PeerReviewed

2012-05-31

1298