Financial statements auditing

Financial ratio analysis is only as valid as the financial information on which it is based. If the information provided in the financial statements hasn t been independendy verified (audited), the results of a financial ratio analysis are not likely to give the reader an accurate assessment of the financial performance of that organization. While financial ratio analysis can provide valuable insight to the performance of any organization, it is important that the users of financial ratios are also mindful of their limitations ... 

When reading an annual report, one should look at the independent accountant s statement (see Table 3.13). The certificate will state that the auditing steps used in the verification of the account meet the accounting world s approved standards of practice, and that the financial statements contained in the annual report were prepared in conformance with generally accepted accounting practices (5). 

We have audited the accompanying statement of consolidated financial position of Monsanto Company and subsidiaries as of Dec. 31,1994 and 1993, and the related statements of consolidated income, shareowners equity and cash flow for each of the three years in the period ended Dec. 31,1994. These financial statements are the responsibility of the company s management. Our responsibility is to express an opinion on these financial statements based on our audits. 

The independent accountants certification, which states that the financial statements have been prepared in accordance with generally accepted practices, and the auditing steps meet the accounting world s approved standards of practice. 

The auditor s comfort letter confirms that the financial statements included in the offering circular are accurate and that there has been no material change in the financial situation of the issuer since the latest audited financial statements. 

The arranger should obtain a comfort letter from the auditors to the issuer confirming that all financial information presented in the offering circular has been correctly extracted from the audited financial statements and that there have been no adverse changes in specified financial items since the last financial year end, in the case of balance sheet items, or when compared with the corresponding period in the last financial year, in the case of profit and loss account items. 

The Director-General may make such ex gratia payments as he deems to be necessary in the interest of the OPCW, up to such limits as may be determined by the Executive Council and as may be approved by the Conference of the States Parties. The Director-General shall, in the OPCW s audited financial statements, submit a statement of such payments to the Executive Council and the Conference of the States Parties. 

The External Auditor shall issue a report and opinion on his audits of the OPCW s financial statements, which shall include such information as he deems necessary in regard to matters referred to in Regulation 13.4 and in the additional terms of reference set forth in the Annex to these Regulations. 

The External Auditor shall transmit his report and opinion and the audited financial statements, in accordance with any directions given by the Conference of the States Parties, to the Executive Council. The Executive Council shall examine the audited financial statements and the External Auditor s report and opinion, and shall forward them to the Conference of the States Parties with such comments as it deems appropriate. The External Auditor s report and opinion and the audited financial statements shall be submitted to the Executive Council preferably not later than 31 May following the end of the financial period to which they relate. 

The External Auditor shall express an opinion on the audited financial statements which shall be signed and dated. The form and content of the External Auditor s opinion shall follow the audit in Financial Regulation 13.3. 

The Tmst Fund shall make financial statements for each year in which it operates. These statements are subject to audit by the External Auditor. 

The transfer of assets shall include an eventual audited cash surplus, if any, which will be reflected in the final audited financial statements of the Commission. The transfer of assets shall not include Capital Advance payments made by Member States to the Commission, since these funds shall be reimbursed to Member States in accordance with Commission Financial Regulation 6.2, taking into account Financial Regulation 6.3. After the final audit of the Commission s account is completed, any cash surplus shall be reimbursed to the Member States of the Commission in accordance with Commission Financial Regulation 6.1(b), unless a Member State decides to temporarily credit this amount to the OPCW until it becomes a State Party. Cash surpluses of those Member States which are also States Parties of the OPCW shall be treated in accordance with OPCW Financial Regulation 6.3(c). 

Procedures/responsibilities the CER does include a section titled Environmental Audit that identifies the key role of internal auditors, and a section on training that emphasises the financial commitment, particularly to safety training. Even so, although reference is made to EniChem s internal EMS, there is no clear definition of responsibilities within the organisation or of procedures designed to ensure compliance with the guiding principles outlined in the policy statement. 

Safety auditors should collect the following financial information relating to safety input (1) If there is safety assets (2) Safety spending does take place (3) Safety assets are owned by the audited entity (4) Structural condition of safe assets (5) Safety assets records are complete (6) The safety asset valuation is appropriate (7) Ending balance of safe assets is correct (8) Disclosure of safety assets in the accounting statements is appropriate ... 

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