One of the most important tasks of the board of directors of a company is to ensure that the accounting practices and financial reports realistically address to all stakeholders. Only in this way you can prevent opportunism within the organization and the third parties do not negatively affected from the activities of the management. In other words, managements should test their accounting processes and financial reports with the help of certain tools and individuals.
In risk assessment, it should be considered that approximately 75-80% of fraud and irregularities are caused by the organization’s employees. Staff pose a greater risk than information hackers and external risks should be included if the company especially contains confidential data and allows remote access to the computer network and fraud and irregularities can be repeated unless adequate accountability and punishment is provided. In this respect, audit is just like a shield in the protection of the corporate health.
In terms of monitoring the flow in the company, one of the most important tools is effectiveness of auditors and audit firms. Auditing is a systematic process that collects evidence impartially and evaluates these evidence in order to investigate the degree of claims relating to economic activities and events in compliance with predetermined criteria and inform those who are interested in the results. Audit studies in practice, can be done by both internal auditors and external auditors. While internal audit is carried out by the audit committee and the auditors, the external audit can be made by authorized independent auditors.
Audit performs the protection of health and the application of accounting standards within a set of standards and codes. Likewise in risk-based independent audit while highest risk of fraud transactions and accounts are determined which leads to significant errors in the financial statements, not only results are checked, also reasons (inadequate controls) are checked. Therefore, the audit structure plays an important role in strengthening the quality of accounting and financial transparency. In this context, as UITSEC Company; we consider the potential impacts of audit structure on accounting practices and financial transparency in our studies.