As suggested by Rezaee et al., (2018), auditing can be illustrated as the process of assessment of accounting documents of a business entity's accounting records, along with physical scrutiny of its resources. In case if the same is executed by a certified public accountant (also referred to as CPA), then the certified accountant can necessarily express an outlook regarding fairness of financial statements of the business enterprise. In essence, this viewpoint is thereafter issued together with the financial assertions to the entire investment community of the firm (De Vlaminck & Sarens, 2015). So, when presented with the assertion that “auditing is not necessary for effective financial reporting”, I would hereby like to express my disagreement with this assertion. Further, main task of an assessor is to carry out comprehensive evaluation of both in-flow as well as outward stream of cash, the entire amounts that the business unit owes and overall worth of assets or else resources possessed by the corporation. Also, assessors review and check the overall worth of assets of the business concern at the time when assets were obtained, their optimal usage and fine points of tax disbursement by the business concern (Rezaee et al., 2018). Therefore, in case if an assessor fails to carry out the job effectually, outsiders such as financiers, creditors plus other users of the financial information can lose faith and doubt authenticity of the overall financial statements. Therefore, this is also imperative in luring financiers as well as lenders who bring finances to the corporation for upcoming projects. Also, for a business concern to ascertain if its processes are effectual, they need to ne analyse at a regular basis to make certain that the results are what the corporation wants and needs to progress and acquire capital. De Vlaminck & Sarens (2015) illustrates that the way management of the company is concerned about overall integrity as well as reliability of the financial assertions designed by the system of accounting information. Business concerns are worried about reliability of these reports as they and reflect whether the business is attaining business objectives.
De Vlaminck, N., & Sarens, G. (2015). The Relationship Between Audit Committee Characteristics And Financial Statement Quality: Evidence From Belgium. Journal Of Management & Governance, 19(1), 145-166.
Rezaee, Z., Sharbatoghlie, A., Elam, R., & Mcmickle, P. L. (2018). Continuous Auditing: Building Automated Auditing Capability. In Continuous Auditing: Theory And Application (Pp. 169-190). Emerald Publishing Limited.