IRR – A different perspective
While we commonly encounter the term "IRR" as Internal Rate of Return in financial contexts, in a different perspective, the term IRR is being referred to as Information being relevant and reliable in the context of audit information.
Relevant information is directly applicable to the audit objectives. It helps auditors assess whether financial statements fairly represent the financial position, performance, and cash flows of the audited entity. Relevant information enables auditors to make informed decisions and provide meaningful insights to stakeholders. Without relevance, auditors may waste time and resources analyzing irrelevant data, leading to inefficiencies and potentially overlooking critical issues.
Reliable information is accurate, consistent, and free from bias or error. When auditors examine financial statements or other data, they rely on the assurance that the information they're analyzing is trustworthy. Without reliability, auditors cannot confidently assess the financial health or compliance of a company. They may question the integrity of the data and the credibility of the organization's operations.
In short IRR refers not just to the information alone and also the source of information being relevant and reliable.
By CA L.Muralidharan and CPA L.Mukundan
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