We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
EXTERNAL FINANCIAL AUDIT IN PROJECT-BASED COMPANIES. SUPPORT OF INTERNAL CONTROL SYSTEM IN THE ASSESSMENT OF ENTITY'S GOING CONCERN.
- Authors
Głodziński, Eryk
- Abstract
External financial audit is one of the instruments that aims at confirming the reliability of financial statements prepared by the company, and assesses if the entity will be able to continue the operation in the foreseeable future. The main objective of the paper is to examine the support of internal control system in the assessment of project-based entity's going concern status that is one of the tasks of external auditors. The conducted research raises the following issues: how can the auditors confirm the going concern status in project-based company? Is the support of internal control system (ICS) needed and required in the external financial auditing (EFA) process of project-based company? What are the possible links between ICS and EFA? The research findings result from participant observation of external financial auditing conducted during year closure processes, and many discussions with auditors and bookkeepers. In order to answer the research questions, analysis of literature in the fields of finance and management were conducted. The study showed that without information obtained from internal project control system the auditor's assessment of going concern status in project-based company would be much more difficult, even not possible. The external auditors should base on products coming from managerial accounting system, such as project economic estimations, project risk assessments. The above mentioned correlation influences the methodology of project controlling that has to adhere to financial accounting principles and fulfil the manager needs. The conducted research pointed out that the cooperation between auditors, bookkeepers, and project controllers is needed. But the scientific papers in the field of management science do not analyse comprehensively the influence of managerial accounting on operations and results of external auditing. The issue seems to be more complex in project-based companies where sustainability of the entity bases on current and predicted performance of projects.
- Subjects
AUDITING; PROJECT finance; RISK assessment in project management; FINANCIAL statements; MANAGERIAL accounting
- Publication
Project Management Development - Practice & Perspectives, 2015, p106
- ISSN
2256-0513
- Publication type
Article