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Auditing as a means of control

Do you remember those moments when your mama or papa would often tell you after eating you dinner, Anak, gawin mo na assignments mo, at ichecheck ko, kung tama(Son/Daughter, do your assignment and I will check later, if it is right). Did you went through those moments when your parents would scold you after seeing the dishes in the sink that you, yourself has cleaned because your parents have told you so. Did you even get the logic of all these things? Why your mom has to check you, why didnt she do it herself or how do they know they are right and so on. One point in our life we are being checked and helped by people whom are knowledgeable about certain things that we are trying to learn, well you know what they say learn from the expert. From this point of view, sprung the concept of Auditing, it acknowledges that most of the time we cannot check our own mistake, it takes people to recognize that we have dirt on our faces, well unless you look in a mirror, but still you misses somethings. Personally, Auditing in layman terms is checking, so it becomes an everyday thing. Hence, Auditing in the industry and commerce becomes an integral part of a business activity due to the regulatory function of inward and outward bodies. It becomes complex due to the complexity of transactions that happens in the real business world and the compliance of each class of transaction to the Generally Accepted Accounting Principles. Everyone who depends and relies on the information about business, generally looks and based their decisions on the audited financial statements, because it gives them a reasonable assurance that these financial statements fairly states the true picture of what happens in the business and is accordance to Generally Accepted Accounting Principles and is free from material

misstatements whether due to fraud or error. Auditing helps you ascertain, your trust in the company because an independent and competent person who objectively attest to the fairness of the companys financial statements. How is control related to Auditing? Auditing as defined by the American Accounting Association as a systematic process by which a competent, independent person objectively obtains and evaluates evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users. Control is a function of directing or influencing in the course of events to get them to an end, goal or objective. Hence, the goal of a business is to make profit, your control must be directed to that goal. In a corporation where there is a need to be audited has their goal of maximizing the shareholders wealth, and shareholders wealth is affected by the outlook of an investor to the company be as it may, pessimistic or optimistic, laying this basis, we can say that the Company is just but establishing its integrity in making themselves audited by firms. Control becomes prevalent during the engagement process of audit by which a occurring evidence that there is likely misstatements are being signaled to the auditor so he can provide measures to correct those actual performances. Auditor helps the company maintain safeguards to possible threats in the company, it maybe financial statements frauds or defalcations or theft of assets, this is a control function unique to an auditing because it helps the company become more focus on their objective, not only to the objective of few or one individual. Auditors go through the processes of the business, getting an understanding of the business, how it conducts, it operates, it transacts is under the nose of the auditor. Auditing is like having the eyes of a corporation on itself, whether all of the different

parts are working hand in hand, in harmony and in line with the objectives. Auditing is a regulatory function, works not to pass judgment whether how good or bad a company is, but mainly to help them achieve their goals and objectives in line with regulatory bodies such as the governance of the company, government and international standards.