Strategic Decisions in the Context of Company Audit
Journal Title: Науковий вісник Національної академії статистики, обліку та аудиту - Year 2016, Vol 0, Issue 4
Abstract
Strategic decisions of companies which, if analyzed and summed up by auditor, give auditor evidence of the occurrence or absence of audit risk of company’s ongoing operation in the foreseeable future. Particular attention is paid to defining the signs of business strategies which implementation is incompatible with the company’s future operation. The objective of the article is to study and systematize the process of taking and implementing strategic decisions in the context of company audit. At theoretical level, auditor needs to be aware that effective companies often carry out structural changes in order to comply with volatile market conditions or enhance their competitiveness. When planning audit, an auditor needs to consider the classification of company strategies by the criterion of their impact on the company’s economic growth. This classification is highlighted in the article. Analysis of current practice shows that companies facing risk of shutdown in the foreseeable future are characterized by large amounts of surplus assets and employees, not enabling them to make main products cost-effective in short terms. A key problem for companies, especially in times of crisis, is search for extra funds to implement stabilization measures. Its solutions include: a) obtaining of internal reserves due to business restructuring; b) mobilization of external resources on project basis, by issue of shares, sale of assets, obtaining of loans, etc. Auditor needs to grasp whether the type of strategy chosen by company management is designed for company’s economic stabilization or its shutdown.
Authors and Affiliations
S. V. Selishchev
Keywords
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