Audit..Do it add value?

Is now 12am and I am here in front of my desktop blogging. I just arrive home from work...

It have been a tough day and it really frustrated me a lot. I log into thestar to see any business news which is hot...and yeah, the audit issue pop up again. The oilcorp saga continue although today EGM had seen Horward been appointed the new auditor replacing Baker Tilly Monteiro Heng.

Very seldom had we seen an auditor giving out qualified report or disclaimer report stating that they are unable to form true and fair view about the financial position of a company. It was even rare case for a public listed company as huge as Oilcorp.

Since working as auditor, I have been discussing with some of my friends and also colleague regarding how much contribution are we as the auditor toward the financial report? Are audit been perform because the company need to perform or the company want to perform? Why do company wanted to fork out portion of the money for audit services? and Did audit really add value or it simply incur another extra expenses toward the company?

Firstly we were all known that auditor is to be there to perform verification, testing and and proving the financial statement of the company are free from material misstatement and error. As part of the responsibility of the auditor is to form an opinion whether the account was prepared in true and fair view... However, human are always creative and innovative, this is why, regulation and guideline is given to prevent any misstatement or window dressing been done in the account.

Been auditor in another part is full of responsibilities. ALthough the responsibility of auditor is to report our opinion to the member of the company, but it was largely affecting the whole company. If auditor were to form an qualified opinion or disclaimer, the company is in a grey of bad reputation or decrease in share price. Thus, auditor must be capable enough to perform the job accurately, carefully and most importantly independently.

Independent on the other hand is so difficult to be measured. How did you measured independent? Even the basis of audit, which is true and fair is not clearly define...Auditor itself are nowadays getting younger and younger...It seem like audit work suit for youngster rather than experience staff. So could we really expect the youngster to know more than the company accoutant?

Moreover the audit fees are paid by client and it was norm that auditor will try to please the client. Audit is consider service line and is norm also that we always said client always right...But in case of audit, the world seem to be rounded up. Although the client paid the auditor, the nature of this transaction is client must take in the opinion of auditor. So if the auditor claiming something which was not favourable to the company, the client will not be happy and it was time the client will show power by kicking away the auditor.

The reality is the truth now...and thus this will never change. I would said, to be a good auditor, we just act professionally, do what we suppose to do and just be brave...For client or company, remember that ethics, transparent and honesty is the best policies...Company survival are not on the hand of auditor, management or shareholder but more to the mindset of all parties...If management have intention to confuse, convince, con or control the auditor, I believe they may and they also have the power to destroy the company.

No matter how good the management are in hidding the secret, it will one day end up like Enron. Audit may not add value, but it is at least there to prevent the management from expressing their creative talent in cheating the shareholders...