Manually prepared data is paper-oriented and time-consuming. This has been successfully rewritten by the latest Knowledge Management, aptly aided by Information Technology (IT), where data is recorded as invisible magnetic dots on disks and tapes to be stored as files. A sea change has occurred altering the ways an auditor function. Throughout the world, visible changes are taking place in the Audit methodology and outputs to bring about perfect transparency and governance, while auditors rely on electronic forms of data transmission and vouch for supreme transparency.
Forensic
auditing and fraudless accounting are in coinage now. These concepts look for
enhanced efficiency in unearthing the financial anomalies. They try to trace the
occurrences of the fraudulent practices from their roots, while attributing reasons
to them. This has become the need of the hour with the fall of Arthur Andersen
one of the nation's oldest and largest noteworthy accounting firms. Harvey Pitt,
Securities and Exchange Commission Head, has proposed creating1 an
independent oversight board that would monitor the major accounting firms for
accuracy and reliability. The boardcomposed of accountants and other financial
professionalswould have the power to impose penalties.
The
US has the world's biggest financial markets and attracts substantial investment
from around the world. The US is often held as a model for other countries to
emulate when regulating their own markets. The accounting profession in the US
has come under criticism for the failure of Andersen auditing firm to predict
the failure of its client company Enron, the biggest corporate bankruptcy in US
history. Texas-based Enron collapsed just weeks after Arthur Andersen approved
its corporate accounts. The bankruptcy cost investors billions of dollars and
sparked a crisis of confidence in the country's financial markets. It is pertinent
to note here that the social responsibilities of auditors are increasing by the
day. |
