Auditing Assurance & Services

Question: Discuss about theAuditing Assurance Services. Answer: Introduction Auditing and assurance services are important for the contemporary business organization as it plays vital role in providing guarantee about the accounting and financial activities and for this reason it plays significant role in improving the reputation of the business organization. The main role of an auditing firm is to verify the financial statements of the business organization with its actual data or information and then the firm provide certificate to the business firm about their business and accounting procedures (Arens, 2010). The auditing is performed by a legal person, who must not have any personal benefit from the firm, where the auditing supposed to be performed means the auditor must be a neutral person. Moreover, the auditors must look after the benefits of the entire stakeholder of the company and should not be bias to any of the stakeholders (Ruhnke Lubitzsch, 2010). Auditing is important as it detects the drawbacks of the business firm and its accounting system. Therefore, it helps in improving the business activities of the business organization. After finishing the auditing the auditors use to provide a document to the concerned company, which is called audit report and the value of the audit report is immense as it improve the trustworthy of the company ("A Forum on CSR and Assurance Services", 2015). The financial audit of a firm must check the fulfillment of the financial statement with the reality. Alternatively the financial auditors examine the financial statement of the concerned firm in order to check its compliance with the auditing standards. Main Body Analysis The analysis of the case study presents the lehman bankruptcy on September 15th 2008, helps in triggering the global financial crisis. On this day, under the bankruptcy codes of the US, filed for bankruptcy under the rules and henceforth allowing the company to restructure the debts and develop a new structure for creating an appropriate system to be operated in future. The filling of the discriminated set of the events within the company lead to the bankruptcy and thereby it also provides the fulfilling criterias for the global financial crisis. The contribution factor also helps in the creation of excessive liquidity within the market by the global financial crisis and thereby it also indicates the awareness of the fact that allows the mitigation of the excessive liquidity (Horngren, 2013). The global economies are seemed to be aware of the fact with the creation of high interest and thereby the crisis helps in affecting the major economies of Asia. The considerations are made with indicating the factors for the assessment of the risk factors and thereby the failure ensures the crisis with the influx in the international market. The bubbles are primarily caused and thereby it represents the remedial actions that are affects the countries directly (Whittington Pany, 2001). The world was dealing with the security issues regarding the primary holders of the debt instruments and thereby the wealth seems to be securitized in the case with considering the development of the debt instruments. Low interest rates leads to the excessive influx of the investments that helps in regulating the opportunities for the alternative markets. It thereby also helps in considering the sensitive market with the creation of capital movements and thereby the situation is seemed to be volatile in nature. Henceforth the increment of the market leads to the regulation with the creation of the safety measures which seemed to be frenzy and thereby the regulation and the stability measures are created with the alteration of the markets. It thereby creates panic situation in the market and thereby the national government decisions are taken with the creation of belief for the economic variance with the creation of government spending. The use of the frameworks helps in depicting the values that are related to the consumption rate with providing the income and the expenditure rates (Subramaniam Carey, 2011). The contradiction of the arguments is provided with the creation of models for the increm ent of the government taxes and it also seems to be related to the increment of the amount of the income. The above depicts the 1st problem which is being faced by the Lehman and henceforth the solutions are depicted in the above part. The second problem depicts the modern economic thinking and thereby the services provided by Lehman creation the position of bankruptcy for the company. This enables the organization to create the affects in regards to the factors implemented. The organization seems to be going beyond the factors of the equilibrium and thereby the achievement of the divergent goals is mis leaded. The assumptions of the uniformity help in making a imbalance situation for the company and thereby the company is seems to be going to the zero or the negative position. The third fundamental problem that is analyzed in this case depicts the decision making process regarding the economics which represents the replacement of the fiat money by the commodity money (Seetharaman, Sun, Wang, 2011). This created a backing measurement for the organization Lehman and thereby the measurement of the policies with the values is seems to be mis-leaded with the valuations. Apart from these problems the financial policies that are adopted by the company are not appropriately followed and thereby the bankruptcy situation is created for the company. Research The case study depicts the bankruptcy of the accounting firm for the accounting firm of Ernst Young LLP that will pay $10 million for the New York settlement and thereby wrong judgments provided by Ernst Young LLP lead the company to the situation of Bankruptcy. It thereby indicates the problems of the accounting process that are which depicts a sought of massive accounting fraud (Raczkowski and Schneider, 2013). The research depicts that the Lehman Brothers Ltd had to face the penalty for the fraud made in their accounting system of the company and thereby the penalty represents the repayment of about $150 million with the creation of the damages and the investors damages with the equitable relief. It also helps in creating the enhancement of the equitable relief and thereby the settlement leads to the enforcement of the actions in this case which leads to the enforcement of the accounting laws against the Lehman Brothers Ltd (Weil, 2009). The considerations regarding the case dep icts the collapse of the organization due to the fraudulency made by the firm and thereby the law enforcement also helps in considering the reports of the case that represents the actions for the case. With the consideration of the auditors report the provision of the cover report for the clients are necessary in order to prevent the harm for the company. But with the breakdown of the organization, a huge amount of harm is made to public as well as the investors and there the down fall of the economy of the country takes place in the year 2008 (Cohen Simnett, 2015). The case also represents the last lawsuit for the company Ernst Young LLP for making inappropriate accounting and the auditing process for the company Lehman Brothers Ltd. According to the legal consideration the firm made the wrong report for the Lehman Brothers Ltd. The transactions that are made with the consideration of the account helps in the depicting the Lehman Brothers Ltd bankruptcy case and thereby the triggering of the global finance is taking place with the consideration of the transactions (Whittington, 2007). The complaint was alleged against the company before seven years of bankruptcy but the bank made transactions which seems to be known as the Repo 105s which represents the short term financing system. The agreement was made by the attorney and last month the settlement is made by creating the bankruptcy mitigation issues in the accounting firm with following the auditing and assurance policies. Therefore the company is seems to be eligible for the case and thereb y the penalty created by the attorney is followed by both the companies and thereby for the repay of the situation, liquidation plan was slated for the repayment from the creditors. The case study represents the enhancement of the dark poll platform with the creation of high speed trading for gaining the initial position. Recommendation The auditors should perform their duties and responsibilities faithfully. There are several efficient tools, techniques of auditing that help the auditors to perform their duties more efficiently, and effectively, which should be efficiently used by the auditors to perform better auditing duties for the concerned firms. The auditors as well as the auditors firms should not be bribed by anybody and the process of auditing should not be influenced by anybody (Arens, Elder, Beasley, 2006). The auditing should be for the entire stakeholders of the company and it should be beneficial to the entire stakeholders of the company. It should not be benefited to the limited stakeholders. The responsibility of the auditors is to design, apply as well as maintain the internal controls of a company, so that the material misstatements can be prevented, which use to be occurred due to error or due to fraudulent activities (Leung, 2011). The auditors should select as well as apply the accounting poli cies and principles according to the regulation of the country as per the nature of the business activities performed by the business firm (Gill, 2001). The financial statement of the company use to be prepared by the accounting manager or financial manager of the company and the auditors duty is to verify the information and data from the financial statement and check compliance with actual data and then prepare audit report for the company. The auditors mainly provide their opinion about the financial statements, which they verify during the auditing process. The auditors have to use all the auditing tools and techniques in order to perform auditing as per the needs and the nature of the concerned firm, in which the auditing is performing (Imoniana Perera, 2016). The auditors must be faithful and honest as in their performance there are many individuals and entities and depended and the future of the stakeholders of the company largely on the hand of the auditors. As the sharehol ders and investors and other stakeholders of the company use to take their important decisions on the basis of the audit reports of the company, especially the important investment decisions are hugely influenced by the auditors report, thus the auditors must acknowledge these fact and try to be faithful to their profession and perform the duties faithfully and efficiently so that the users of the auditing report get benefit from the report (Knechel, 2007). Conclusion In order to perform an auditing responsibility of the firms an auditor must verify the accounting data and it is most important to the auditors to determine that whether the data are recorded accurately and the data reflect the economic incidents on actual basis, which occurred throughout the accounting year (Louwers, 2005). Therefore, in this background of an auditing performance of the financial statements the common rules are usually accepted the accounting principle in the maximum number of cases. In addition to that, the auditors must have sound understanding of accounting and must have the experiences in the gathering as well as interpretation of the evidence collected in an auditing procedure. The economic relationship among the auditors and the clients is subject to applicable business law for the auditing contract (Messier, 2000). The auditors plays important role in providing assurance to the users of the financial statements of the company or the stakeholders of company by providing important audit report about the company. However, it is observed that in many cases the auditors involve in fraud and approve the misinterpretation from the company in their accounting report in this way the auditors cheat the stakeholders of the company and the user of the financial statement (Reding, 2007). 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