Intl Auditing Exercise

Meredith Miller International Auditing Exercise October 18, 2011 Recommendations for improving governance in organizations  Good governance starts

with tone at the top. If boards formulate their values, they can then evaluate management based on those values. Because the board is shareholder’s representative, it should decide the risk appetite, level of integrity, etc in the interest of investors.  Directors should competently fulfill their duties. Board members have an important responsibility that should not be taken lightly. They need to fully understand the organization and have experience and knowledge to make sure that the company is moving in a direction where risks are managed and strategy is executed. Recommendations for improving financial reporting  Global capital markets would be best served by one set of principles-based, high-quality financial reporting standards. The world is flat- markets are global. If each country converts to IFRS, companies around the world could be compared apples to apples, inviting global investing and better evaluation.  Financial reporting standard setters should simplify their standards. Today financial statements go on for pages and pages and are confusing and convoluted. Simplification would allow non-accountants to use them. Recommendations for improving financial audit  Auditor communication should be improved. The more boards know, the better decisions they can make. Having fuller audit committee reports would be a valued service.  Auditors should be supported with additional practice development. Especially in the US when we are dependent on rules, training on professional judgment would improve audits. Recommendations for steps toward integrated business reporting  Management commentary should put the numbers into context. Management commentary should be open and transparent, instead of the “vague to no one has grounds to sue us>”  More continuous business reporting should be encouraged. Investors can only make decisions based on the latest quarterly statement and make decisions on missing information. Missing recommendations  XBRL should continue to be encouraged. In order to provide a more continuous business reporting, ease of use, and apples-to-apples comparison, countries should require the use of XBRL.

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