Auditors must get up-to-date with the new world.
The saga of e-district should serve as a warning to auditors. There was a time when they could visit a warehouse and ‘kick the tyres’, literally making sure that what the company claimed it had produced really existed.
There are many seasoned auditors who as juniors were sent to far flung outposts to make sure all was in order.
But life is not so simple now. The auditor can no longer touch and feel what is produced – many new company valuations and productivity targets are based in part on website hits.
There might not be a statutory obligation for the auditor to report on such measurements, but surely for its own reputation the profession should check such claims.
Several large firms have called for the wider recognition of standard internet metrics – this deserves everyone’s support if more fingers are not to be burnt after the dotcom gold rush.
E-district’s chief executive was shown the door after it was discovered page impressions, users and revenues had been overstated for a period that could have stretched back to before flotation.
Investors who bought into the company would certainly have been comforted by reputation of the company’s advisers, perhaps unaware of the limitations of the audit.
Investing in such companies is risky, but there is also a risk for auditors if they cannot measure and account for the new business world.
In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...
View resourceIn recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...
View resourceIn a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...
View resourceThe first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...
View resource61% say providing financial support for their family is of importance to them, with 77% currently doing so Read More...
View articleStartups face unique financial challenges, such as cash flow volatility and equity-based compensation complexities. Innovative strategies and technolo...
View articleThere is optimism that the IPO market will rebound in the second half of 2024, driven by pent-up demand and potential improvements in economic conditi...
View articleIn 2019, the a survey conducted by the FRC highlighted that only 17% of women held partner-level positions Read More...
View articleDains believes a corporate structure is the best way to maximise the benefits of its growth strategy Read More...
View articleBoth employer and employee will benefit from flexibility and cost-saving Read More...
View articleThere are nine key areas that accounting practices must get to grips with as client expectations and technological developments rise, while team membe...
View articleWhen employees publish opinion and statements on social and other online mediums, they may be leaving themselves open to interpretation of codes of et...
View article