Audit Effect
The results of annual audit activities are not represented only by the improper amounts referred in the Audit Report.
(1) Audit findings on a part of all accounting
In-office documentary audit has certain limitations in terms of depth of the audit. Therefore, the Board conducts field audit to find out what took place behind financial transactions. However, the field audit cannot cover all the financial transactions in all the offices of all the auditees. All the audit cases, and thus their improper amounts, reported in the Audit Reports come from such field-audit cases.
(2) Rectification and improvement by instruction/advice made in the course of the audit
The Board makes instructions/advice to the auditees in the course of the audit to rectify and improve inappropriate cases which are not serious enough to be referred to in the Audit Report.
(3) Ripple effect in the future
The Board’s audit findings produce the effect to prevent recurrence of similar cases for the future after the auditees take appropriate actions. Among several types of audit findings, Presented Opinions and Demanded Measures, and Measures Taken have more such effects because they eliminate common cases of similar cases in the auditees’ operations.
(4) Deterrent effect
The deterrent effect against the auditees’ illegal and improper accounting can be expected because the auditees are required to monthly submit the statements, vouchers and other supporting documents for the Board’s in-office documentary audit as well as to be subject to the field audit once a year or in several years.
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