Sunday, November 13, 2011

Value of external audit to retail investors

This is an interesting article with regard to the value of external audit to retail investors in Singapore. Please refer to the link:

A survey was conducted by the Association of Chartered Certified Accountants (ACCA) and Securities Investors Association (Singapore) (SIAS), who sent out survenys to their own 390 members. As evient from the link above, 80% of the respondents opined that audited financial statement is important sources of information to guide their investment decisions.

In addition, the respondents also commented that the scope of audit should be extended, especially for two main areas:specific assurance on a company’s internal controls and a report on the adequacy and effectiveness of a company’s risk management programme.

In our opinion, the internal controls and risk management programme is especially important to prevent future unfavorable against the entity, and minimise the risks that the entity is been exposed to. Retail investor may feel more comfortable with their own investment if the investee has a strong internal controls in-place and effective risk management assessment programme.

For instance, the investee ( i.e. a entity listed on a stock exchange) may find an opportunity to invest in certain projects. A stringent risk assessment programme may help to evaluate the risks involved in the projects to ensure that all risks are been considered while making investment decisions.

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Auditors and Accountants said...

It is a fascinating article alright. Some really interesting facts, figures and insight. Thanks for the post!

Castors said...

Really great article

Arvi Hautala said...

Look's like that auditing in singapore is not really bad at all.fantastic

Kimteh said...

It's really nice post. Thanks for sharing us.
Accountants London

Audit Manager said...

Thanks for this post, this is a very helpful tool! Knowledge is always helpful in Audit ;)