http://www.chinadaily.com.cn/china/2009-09/15/content_8690848.htm
Summary
Auditors hired from the National Audit Office (NAO) for the Sichuan earthquake funds announced that 14 reconstruction projects had been finish and 62 projects are on its way. The reconstructions includes rural houses, schools, transportation, power and power grids, irrigation and telecommunications projects. There were no major legal breaches but NAO did found some reconstruction fund problems. Anxian country in Sichuan enlarged its losses from the earthquake when planning dike construction. At first, the central finance gave an extra 15.5 million yuan but after auditing Anxian refunded the money. Another problem was in Wenchuan where it applied for 2.6 million yuan for the repair and reinforcement of six residential buildings, but the real cost was just more than 900,000 yuan.
Connections
In the first chapter, the textbook gives the definition of an auditor: a professionally trained accountants who add credibility to the financial statements fairly present the company's results.
This article reports about the Sichuan earthquake, where people are not being honest about the funds, so the NAO hired auditors to look at the projects and funds. In the article, it shows that auditors are really important because auditors helped saved lots of money and to give those money back to the people who really needed help.
Reflection
I feel that auditors are really important and professional after reading this article. I believe in China and many other places in the world, lot of people are taking advantage of their power for their own good. Many people exaggerate the amount of money and take the money for themselves. It is not fair to the people who really needed the money. It is a good thing that more auditors are being hired to examine projects and companies because it can help lower the amount of legal breaches and to provide fairness presentation.
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I totally agree with your reflection! I think that the buildings in China collapsed like clay models was because the lack of intergrity that was put into building the foundations. The constructing companies might forge an estimated amount for the purpose of having the extra cash flow right back into their pockets. With the little amount that was put into these project, it's no wonder that the foundations of these buildings are so weak. They were built with the worst materials, cheapest there is. I fear for those citizens who are to use the buildings that were built with poor foundations everyday. Their lives are in danger. The companies that take the money are just earning the quality money without doing any quality work.
ReplyDelete-Kate Wong
I believe that it is a serious worldwide issue about dishonesty of companies. The greed of people always motivates them to do something which may benefit themselves and cause the others a lost. Almost every day there is someone who overstates their company’s financial statements to get money in their own pocket in the world. From this article, it points out the importance of auditors. Having a professional auditor to check the book of a company would make the financial statements more accurate and fair. So the statements would allow investors to make a better decision of their investment. Besides, I think it also brings out the importance of following the GAAP, so this kind of issue would not happen again.
ReplyDeleteRonald C.