Modern Auditing and Assurance Services

Question: Discuss about the Modern Auditing and Assurance Services. Answer: Introduction: Martin Shkreli is a famous American entrepreneur as well as a pharmaceutical executive officer. Martin is founder and former CEO of Retrophin and Turing Pharmaceuticals. Moreover, Martin is also co-founder of the hedge fund MSMB Capital Management. In current, he is famous as the most hated man of the world because of the high drug prices. Along with this, the story of Martin Shkreli tells us numerous important things about corporations, shareholders, accounting and auditing. As it is well known that Martin believes that a corporation is a major source of money. An entrepreneur can earn high profits with the help of a corporation (Pollack Goldstein, 2016). But, in fact, it is not true. A corporation is not only for the entrepreneur but it is also the other people who work in that corporation. On the other hand, it should be noted down that, according to Martin Shkreli, the shareholders are only the source of funds. Martin believes that by using shareholders funds, he can earn more and more money. He does not care that people invest their money to earn higher profits.The story of Martin Shkreli tells us that we should invest our money in a public listed firm only. The main reason behind it is that a listed company is totally obliged to pay its liabilities in an effective and an appropriate manner (TheGuardian. 2015). Along with this, a public listed firm cannot use the funds of public for its personal use. A listed company will work for the welfare of the people who are related to the firm. In addition to this, it should be noted down that, Martin Shkreli performed a lot of fraud activities to earn higher profits. The story of Martin also tells us that he was unable to perform all the functions of accounting and auditing. The documentation of the firm was not proper. The congressional investigators affirmed that they got around 25,000 pages of documents and they do not reveal exact position of the firm. Most of these pages were related to the internal revenue projections of the firm. There was an absence of transparency (Mclean, 2016). Transparency is a major principle of the accounting and auditing. The investigators were also unable to evaluate and monitor the cash inflow as well as outflow of the firm. Apart from this, it is clear that, Martin Shkreli was a fraud person who cheated people to earn money. The story of Martin is helpful to increase the awareness and knowledge of people. Moreover, with the help of his story, people may know that how a person can play dirty games and also use people to fulfill his own personal goals objectives. The people also learn that this type of success and money is temporary (Picchi, 2016). The story of Martin gives advice to the business entrepreneurs that they should think about all the people (shareholders, employees, customers, etc.) related to the firm. The business organizations must perform all the accounting and auditing functions to increase the transparency and to win the trust of the people. If I had eight hours to chop down a tree, Id spend six hours sharpening my axe. This is the famous quote of Abraham Lincoln who worked as the sixteenth President of the US. This is an inspirational quote that motivates people to use their time and mind in order to do things in an effective and a more comprehensive manner. According to this quote, the people should make effective plans and strategies to accomplish their goals as well as objectives in a specified time period. The quote is very beneficial to create value for the people (Morani, 2015). Moreover, with the help of this quote, Abraham Lincoln wants to spread message that people should utilize their available resources to accomplish their personal and professional goals in an effective and a timely manner. On the other hand, this quote also has its importance in the context of auditing and auditors. The quote inspires auditors to act wisely to conduct audit of a business organizations. According to this quote, the auditors must collect all the accounts, records, documents, etc. of an organization to know the actual position of the firm. The auditors must have a close eye on all the financial activities of business organizations. It is because of with the help of this they would be able to know the actual position of a particular firm (Hildebolt, 2010). Apart from this, if they will only consider the accounts, documents, records, and so on of the firm then they would not be able to know that what is going on in reality. In addition to this, the quote motivates auditors to use their sharp mind at the time of auditing. The intelligence and wisdom of auditors plays a major role to conduct an audit in a short time span. Moreover, the quote provides a deep understanding to auditors; so they would be able to perform their roles and responsibilities in an effective and an appropriate manner. The auditors would also be able to know the importance of auditing to the business organizations (Ballard, 2011). Along with this, the auditors must use effective methods to perform all the auditing functions in a pre-determined time period. On the other hand, it should be noted down that, in current, auditors take a lot of time to conduct the audit of an organization. The main reason behind it is that do not use effective methods strategies of auditing. They only depend on the documents, records, and reports of the firm to conduct an audit. In that case, the quote of Abraham Lincoln gives message that the auditors must use their intellect power to conduct the audit of the firms. They should not totally depend on the documentation. It is because of the documents of business organizations do not reveal actual positions of the businesses (Leung, Coram Cooper, 2012). In this way, it can be said that, the quote has its importance in the context of auditors and auditing. The quote motivates auditors to use their brain power to conduct an audit in an accurate manner. References Ballard, N. (2011). I Am Money's Master. UK: I Am Money's Master. Hildebolt, W. (2010). The Professional Entrepreneur: When Cowboys Grow Up. UK: William M. Hildebolt. Leung, P., Coram, P., Cooper, B. J. (2012). Modern Auditing and Assurance Services, Google eBook. UK: John Wiley Sons. Mclean, R. (2016). Martin Shkreli on drug price hike: '$1 billion here we come.' Retrieved From: https://money.cnn.com/2016/02/03/news/shkreli-turing-daraprim-price-house-hearing/ Morani, A. (2015). 10 Hours Crash Course on Budgeting: Prepare a Budget for your small business. USA: Amir Morani. Picchi, A. (2016). Martin Shkreli-style drug price hikes are everywhere. Retrieved From: https://www.cbsnews.com/news/martin-shkreli-style-drug-price-hikes-are-everywhere/ Pollack, A., Goldstein, M. (2016). Martin Shkreli All but Gloated Over Huge Drug Price Increases, Memos Show. Retrieved From: https://www.nytimes.com/2016/02/03/business/drug-makers-calculated-price-increases-with-profit-in-mind-memos-show.html?_r=0 TheGuardian. (2015). Martin Shkreli announces turnaround on 5,000% price rise for drug. Retrieved From: https://www.theguardian.com/business/2015/sep/23/us-pharmaceutical-firm-to-roll-back-5000-price-hike-on-drug