This is important, because having this system will ensure increased amounts of: accountability and transparency. as, auditors will keep detailed records disclosing their: findings and initial remarks. Over the course of time, this increases the accuracy of the financial reports that are being released. as, this can be used to: identify weaknesses in a company's internal and external controls. At which point, auditors can help organizations to create effective mechanisms, to addresses these weaknesses. Once this takes place, this means that financial information being provided to the public is accurate, by ensuring that any kind of loopholes are not exploited. When you have increased amounts of documentation / record keeping, this helps to prevent possible abuses through: increased transparency and monitoring. ("AU Section 369")
At the same time, the provisions of confidentiality are ensuring that the clients' interests are protected at all times. This means that auditors...
As they have a responsibility to protect the shareholders, yet the way the information is utilized, must be protected at all times. In this aspect, the law helps to improve the accuracy of reporting, by allowing clients to feel that they can be honest with auditors. Once this occurs, it means that there will be greater disclosures of financial information to them. At which point, they help them to: establish policies and procedures that will improve the accuracy of their reporting. This will have an impact upon the profitability of the organization, as these practices will improve productivity and reduce inefficiencies. ("AU Section 369")
Bibliography
"AU Section 369." American Institutes of Certified Public Accountants, 2010. Print
MLA Format. http://owl.english.purdue.edu/owl/resource/747/01/
