The Role of External Auditors in Accounting Assignment

The Role of External Auditors in Accounting - subsidization ExampleIn most cases, a fraudulent act exists when one or more auditors authorise inaccurate accounting on behalf of a company for the reason of tax evasion or to strategically register for an Initial Public Offering (IPO).To prevent moral hazards associated with the auditors liability, the British Serious Fraud duty has imposed heavy penalties for swindlers and white-collar criminals to shut down or suspend a suspicious championship (Country Updates, 1997). On the other hand, auditors who are found guilty of professional negligence may end up facing a monetary loss or penalty through punitive fines and/or the confiscation of their license to practice auditing in the United Kingdom.As stated by Michael Power of London condition of Economics, it may not be reasonable to expect that auditors would be challenging business models directly and summit strategic issues with finance directors, that is not their job and if we w ant it to be their job then things would fuck off to transform quite substantially The direction of my comment is that we might be expecting too much from this black cuff External Audit in terms of what it actually delivers (Priddy, 2011, p. 59).In response to the statement made by Power, this report testament first discuss the role and responsibilities of external auditors followed by providing a brief overview with regards to the corporate governance. In tone with this, there is a strong need to go through business theories and concepts that will enable the readers to have a better understanding of how businesses in a corporate world function. Based on the single(a) roles and responsibilities of shareholders, internal and external auditors, the board of directors, and the CEO, this report will explain the limits in the role and responsibilities of external auditors when it comes to observe and controlling fraud activities in business.