Audit in Private and Public Sector

Topics: Audit, Internal control, Scientific method Pages: 5 (1173 words) Published: April 20, 2013
Audit in private and public sector

* Research problem

Private companies have lack of confidence, since they are not sure for property of financial records. Procedures and numbers of company are not reviewed regularly. Most importantly, internal controls are getting poorer, and reliability of financial statements is not attaining progress. In addition, errors on tax payment are influencing the yearly activity of company. All these pitfalls happen as result of ignores of annual audit. Many transactions happen during a year in bank account of private companies. The bank sees all these transaction; however, the responsible body for the money is board members. The main responsibility is to control whether or not funds are used appropriately. Therefore, financial records should be audited regularly.

* Purpose of research

The research will increase the awareness of financial makers within private companies. Through interviews private companies will see determine what is lacking their companies. Annual tax control by Administration of Taxes is resulting on high amounts of punishment. This happens as result of lack of importance for external and internal control. The effort of research will be seen in changing the current managing method existing in companies. Annual audit expenses take place within companies’ expenses, rather than leaving the biggest place to marketing expenses of company. Not the last but the least, the audit companies will invest to increase the communication with private companies, in order to contribute in proper and right annual financial statements.

* Significance of research

The audit will determine the need for internal control in company, which increase reliability of financial system in company. The audit contributes to close the financial year properly, and start with a new year. All the misuses of funds and mismanagement of financial system are covered primarily by audit. Most importantly audit prevents issues of becoming bigger in a company, which will negatively affect in upcoming years. The audit program also includes the comparison between actual income and expenses, and budgeted ones. Thus, the further planning of budget is supported by the audit analyses of previous years. Auditor checks some group samples of expenses, whether are approved, valid, and are spent from right category of budget. In addition, auditor checks bank statement of company, and look after high values of transactions, which are completed with printed checks.

* Quantitative Research questions and hypotheses

1. How was the effect of entrance of European standards for business operation into Kosovo’s system?

H1. It was very confused at the beginning, however with much training and presentations held by Ministry of Economy & Finance, it was settled down within company.

H2. The European standards could not match with the previous financial system; therefore it took a long time to get adapted by company, and whole staff.

2. What are the difficulties of implementing audit report recommendations into company?

H1. The audit recommendations often are difficult to be implemented within one fiscal year. The recommendations regarding the structure of company, and operation system can take longer time, in order to be implemented.

H2. Recommendations are mostly concern of management staff, since they are responsible to control the implementation. Most of recommendations are denied by managers, and it takes a long time to verify these recommendations internally.

* Research design and rationale for its selection

The research contains two group studies, the company overview before audit process implementation and overview after audit. Moreover, in statistical analyses two groups will include with a single measurement subject: never audited companies, and rarely audit companies. In this research, the implementation of audit process will be...

References: * Office of General Auditor in Kosovo, Independent Agency, February 2013
* Administration of Taxes in Kosovo, Public Institution, March 2013
* “M&K” Company, Accountant and Audit Services, February 2013
* “Dili Commerce:” Company, Instruction Services, February 2013
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Audit Essay
  • Essay about Audit
  • Coexistence of Private and Public Sectors Essay
  • Public Sector vs. Private Sector Essay
  • Private and Public Sector Essay
  • Essay about Affirmative Action in the Public and Private Sectors
  • Comparison in Private and Public Sector Governence Essay
  • Differences Between Public and Private Sectors Essay

Become a StudyMode Member

Sign Up - It's Free