Audited Accounts, Inappropriate Cut Off Periods, Misuse of Funds

From Biki

The body charged with ensuring ‘market integrity’ and ‘consumer protection’ in Australia financial markets in the Australian Securities and Investments Commission (ASIC). This body monitors the markets to make sure that companies are complying with the corporation laws. It is not an easy task because it is very difficult to legislate all the rules and principles that define right and wrong conduct. Standards of conduct or moral judgements are called ethics. More and more businesses are preparing documents to guide the behaviour of people in the business. These documents are called codes of practice.

Contents 1 Audited Accounts, Inappropriate Cut Off Periods, Misuse of Funds 1.1 Audited Accounts 1.2 Innappropriate Cut-Off Periods 1.3 Misuse of Funds

Audited Accounts, Inappropriate Cut Off Periods, Misuse of Funds

Audited Accounts

All public and some private companies are legally required to have their accounts audited by independent auditors to establish their truth n fairness. An audit is the process of establishing the truth and fairness of the financial reports of a business. Owners, managers and other stakeholders need to be sure that the reports are a valid reflection of the financial position of a business.

Innappropriate Cut-Off Periods

Profit needs to be matched with the costs and revenues that generated it. This is called the matching principle. It is possible to create a false position in the reports by choosing a cut-off period where significant revenues are separated from the costs associated with them.

Misuse of Funds

An effective internal control system would make it difficult to misuse funds.

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