Audit Jurnal
Marianne Ojo. (2009), Oxford Brookes University.
The overall purpose of this article is to be highlighted is why the external auditor is such an important tool in corporate governance. Corporate governance is the system of rules, practices and processes by which a company is directed and controlled. It is basically needed to balance the interest of the stakeholders in a company. Meanwhile, the external auditor is needed to make sure that the company follow the GAAP, checking the accounting record and help the company to resolve problems. In this article, it shows the contribution of external auditor to corporate governance in resolving agency problem. Moreover, regarding this article it is said that the external auditor could help simplify a position whereby creative accounting practices and hyperinflation of figures are discouraged. Thus, the unethical can be identified by the help of external auditor in order to meet corporate governance objective.
In my point of view, I found out that the article has mentioned about the case of Enron in Europe has make the corporate governance require the involvement of intermediaries such as external auditors. From the author study of Enron case, it simplifies that Enron collapse because of ‘substance of the transaction’ rather than others reason (legal form, transparency and management risk). So, the use of the external auditors is really important in company to ensure that the person who has power in the company did not simply use their power to act negatively. Thus, an external auditor is one of effective tools to corporate governance.
The important in publishing this idea is to make sure that unethical issues did not arise in the company and prevent the person in the company to act unethical.
I agree with author opinion that ‘the use of external auditor in performing non-routine task may be more effective’. It is because external auditor works have high objectivity, integrity and independency in doing their
The overall purpose of this article is to be highlighted is why the external auditor is such an important tool in corporate governance. Corporate governance is the system of rules, practices and processes by which a company is directed and controlled. It is basically needed to balance the interest of the stakeholders in a company. Meanwhile, the external auditor is needed to make sure that the company follow the GAAP, checking the accounting record and help the company to resolve problems. In this article, it shows the contribution of external auditor to corporate governance in resolving agency problem. Moreover, regarding this article it is said that the external auditor could help simplify a position whereby creative accounting practices and hyperinflation of figures are discouraged. Thus, the unethical can be identified by the help of external auditor in order to meet corporate governance objective.
In my point of view, I found out that the article has mentioned about the case of Enron in Europe has make the corporate governance require the involvement of intermediaries such as external auditors. From the author study of Enron case, it simplifies that Enron collapse because of ‘substance of the transaction’ rather than others reason (legal form, transparency and management risk). So, the use of the external auditors is really important in company to ensure that the person who has power in the company did not simply use their power to act negatively. Thus, an external auditor is one of effective tools to corporate governance.
The important in publishing this idea is to make sure that unethical issues did not arise in the company and prevent the person in the company to act unethical.
I agree with author opinion that ‘the use of external auditor in performing non-routine task may be more effective’. It is because external auditor works have high objectivity, integrity and independency in doing their