Wednesday, August 14, 2013

Wary auditors use asterisks to flag Risks in Company Books

For investors, it's a new place in an annual report where they can find clues to financial risks facing a company that are currently under the radar but could snowball into something big. For auditors, it's a way to insulate themselves from a future backlash, even censure, on the quality of their audit. An increasing number of auditors in India are issuing a new category of qualifications in their audit reports addressed to shareholders. Shriram Subramanian, founder and managing director, In Govern Research Services has termed as 'emphasis of a matter' statements as these typically appear just before the regular qualifications and are highlighted in italics. We find it useful to discern matters of significance. Many firms are issuing 'emphasis of matter' statements to flag likely financial risks.

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