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Global audit suffering from deficiencies


It goes without saying that any public company must live and die according to the level of return it offers to its shareholders. However, in the case of world's largest organisation, which have some of the most complex management structures, auditing their progress is quite a challenge.

This is a sentiment that has been confirmed by the slightly worrying news published by the International Audit Regulators Report, which claims to have found "persistent deficiencies" in the way companies are audited.

The report discusses the impact these failings could have on shareholders and investors who plough millions of pounds into some of the planet's most well known financial services providers on an annual basis.

Having conducted one of the most in depth and rigorous investigations into audits of all time, the International Forum of Independent Audit Regulators (IFIAR) has produced a summary of its findings, which highlights the areas that are of the most concern.

At the top of this list is companies' ability to measure and estimate the value of their assets correctly. The information presented that a tendency to over value assets could be inflating the worth of form on the stock market, ultimately meaning that it is the shareholders who will be left out of pocket.

The IFIAR also made reference to the responsibility that should be held by independent regulators, as well as the companies themselves. As the only assessor without a vested interest in a company's financial performance, it is them who must be most meticulous when surveying business accounts.

At the head of the report, the organisation warns that the revelations should be treated as a "wake up call" by all concerned, demonstrating that there is no margin for error with the financial crisis very much still hanging over the global economy.

IFIAR chair and board member of the U.S. Public Company Accounting Oversight Board Lewis H Ferguson explained: "More must be done to improve the reliability of audit work performed globally on behalf of investors."

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