As a mater of fact, accounting is one of the most lucrative industries in any economy. It is one area that continues to thrive even when other sectors of the economy are facing job cuts. It is a very broad subject and as such the career opportunities in the industry tend to be many. Any employee, irrespective of his professional qualifications can immensely benefit from studying accounting
The condition of the economy is one of the fundamental reasons why people should consider studying the subject. With the economy showing slow signs of recovery from the recession and firms opting to cut on their wage costs, accounting remains to be resilient job creator.With businesses realizing the importance of having strong internal controls; jobs within the accounting industry have continued to flourish. This is because firms have Increasingly continued to embrace stringent accounting policies to ensure that they remain profitable even in the face of economic downturn. In this regard, accountants have immensely benefited from the surge in demand for their services.
The surge in corporate crime has also resulted in increased demand for the services of accountants. Institutions such as the FBI are increasingly looking for individuals who can easily interpret financial statements. Even in times of prosecutions, accountants, and to be particular forensic accountants are highly required to provide the prosecution with expert witness. Additionally, the requirement by the SEC for all corporations to file their statements with them implies that the demand for accountants is very high.
In summary, the study of accounting will be very critical for individuals as it will provide them with the ability to understand and interpret financial statements. Regardless of the profession in which one works in, the knowledge acquired will help the individual to determine the appropriate company to invest in. From the job prospects angle, the study of accounting will enable one to improve his knowledge and work in many fields such as the criminal justice system
Part 2
On of the fundamental principles of auditing is auditor independence. Hence, an auditor is not supposed to have any relationship with the client that may jeopardize his independence. This is the main reason why auditors have been prohibited from undertaking any audits with their audit firms in a company that they have invested in. Actually, such a practice will be tantamount to some conflict of interest on the part of the auditor and as such may bar him from forming an accurate opinion on whether the accounts reflect a true and fair view of the company’s financial health.
The requirement that auditors should not invest in the firms that they undertake audits flies in the face of the existing reality within the industry. Admittedly, auditing business has mainly been dominated by only four large firms that account for most of the audit fees collected globally. Additionally, it is these firms that engage in most of the consulting work. Hence, it is not logically possible to bar auditors from undertaking audits in the firms they have invested. This may mean that most auditors may not be able to perform most of their duties or may end up disposing their shares in the client firms that the auditors acquire. With most clients consistently rotating their audit firms, the auditors may find it challenging as some of them may end up disposing they shares at losses to satisfy the requirement.
The requirement by the audit firm on employees to dispose their shareholding in the client firms before carrying out any audits is, to say the least, unfair. Auditors don’t have to be punished to the extent of them incurring losses just because their firms have acquired client companies in which they hold a stake. Hence, in this case, it will be practical to request the audit manager to be reassigned from the task instead of incurring huge losses.
Question 3
In auditing, it is clearly stated that the work of an auditor is to ascertain that the financial statements are true and fair.Hence; directors are tasked with the duty of preparing the financial statements. In the situation mentioned, the main stakeholders will be the owners of the company, the management and the directors of the company
The ethical issue facing the accountant in such a case is creative accounting. This is mainly because the accountant realizes that he cannot balance the figures and as such decides to target Property which cannot be easily detected to fix the difference there. Such cases are common in the preparation of financial statements but have the impact of misleading the company stakeholders.
Sara had an alternative to the problem. She ought not to have cooked figures to meet the deadline. Rather, she should have opened a suspense account and place the difference there. She could then have explained to her seniors and requested for more time to look for the source of the anomaly
