Investigation and Reporting

chinex By chinex, 5th Feb 2012 | Follow this author | RSS Feed | Short URL http://nut.bz/1vsulgx1/
Posted in Wikinut>Business>Accounting & Finance

For accountant to achieve fast result relating to audit of companies and investigation, in other to also avoid corruption, embezzlement of companies funds, there need for every companies to adopt this process.

The importance of Reporting and Investigation to Companies


An investigation can be an inquiry into both financial and non financial matters of an organization, which is undertaken for a peculiar and special purpose other than audit.
It will include carrying out investigation on accounting records and the examination of the financial statement. Investigations are also conducted in other area of financial matters which will assist the accountant to report on such recommendations and draw conclusions that are relevant to the purpose of the investigation e.g. Purchaser of business, prospective investments, incoming partner, suspected fraud.
Investigation conducted will entail;
Scope of enquiry, the range of possible clients, the number and purpose of investigations are usually very large.
An accountant which can either be an internal auditor, external auditor, a consultant or an accountant which are placed to carryout investigation on different area of needs because of their knowledge in that nature of business and business affairs.
The range of clients who may commission investigation includes;
1) Companies
2) Individuals
3) Lending institutions
4) Department of Trade
5) Local authorities
The Terms of References on Investigation
The terms of references should be clearly set out in a letter of engagement .With regards to Private Investigation, investigating accountant must obtain prescribed instruction from his/her client as to is terms of reference, purpose of the investigation and amount of detailed work required.
But the case is different when it comes to statutory investigation, the investigating accountant must be fully conversant with statutory regulations, and must obtain necessary instructions where it would be applicable. Among investigations governed by statute include Prospectus, Department of Trade Investigation etc.
Qualities required of an investigating accountant are as follows;
He or she must have sound auditing techniques.
He or she must have a considerable experience.
He or she must have sound judgment.
He or she must have a good understanding of a variety of business enterprises.
Some investigating accountant are yet to understand that there is different between investigations and conventional audit, these differences are outline below;
Conventional audit is carried out for the purpose of expressing an opinion on financial statement whether they show a true and fair view while the main objective of investigation carried out will be determined by the nature of the investigations and the terms agreed with the client, and not to report on the true and fair view shown by the financial statement.
Conventional audit are generally regulated by statutory and professional pronouncement, while investigations are not generally regulated.
There is a strict requirement for the independence of auditor, in the case of audit; this is not so with investigations.
The scope of conventional audit is set out under the relevant statutory provisions, while the scopes of investigations depend on agreement reached with the client and the clients’ particular need.
The timing of conventional audit is important but in the case of investigations, it is conducted on an adhoc basis.
Conventional audit required an accountant to carry out reasonable enquiry into every aspect of an entity’s financial information, sufficient to enable him report on whether it present a true and fair view.
A higher degree of care must be exercise by an investigating accountant than that of an audit with regards to the needs of the client.
Audits are regularly carried out e.g. annually, bi-annually; while investigation is one-off, which comes up only when required.
Investigation for the purpose of preparing an accountants report for inclusion in a prospectus
A prospectus is any notice, circular, advertisement, prospectus or other invitation, debentures of a company or offering to the public for subscription or purchases any shares.
Companies published prospectus when they raise money through issues given the public. The reason is to give the public investing the maximum amount of information about the companies whose shares the public buy.
The purpose of accountant report is to provide financial and other information to the investing public.
The circumstances which a prospectus may be required are;
Where the issues are right issues.
Where the size of the company is small.

Tags

Accountants, Audit Of Financial Statement, Guides, Investigation, Tagging, Wikinut

Meet the author

author avatar chinex
AM A GRADUATE,I STUDIED ACCOUNTING. IN REGARDLESS OF WHAT I STUDIED, I LIKE WRITING AND READING .MY WRITING WILL FOCUS MORE IN ECONOMY,SOCIAL,ACADEMIC, POLITICS,RELATIONSHIP,FAMILY MATTER.

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Comments

author avatar ittech
20th Feb 2012 (#)

nice MSG

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author avatar ittech
29th Feb 2012 (#)

Great share, thank you.

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