Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
Audit engagement and the auditor's
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: Audit engagement and the auditor's
This topic introduces students to the activities of government auditors. This topic also discussed operational auditing since government auditors as well as CA firms also involved in this engagement.
GOVERNMENTAL FINANCIAL AUDITING
In Malaysia, the Auditor General Office or the Jabatan Audit Negara (JAN) staff act as the external auditors to Malaysian government departments and agencies. Some of these staff is also seconded to serve as internal auditors in the government departments and agencies. However, approximately 80% of audits of governmental audits are still contracted out to Certified Accountant (CA) firms since in Malaysia CA firms still do governmental financial auditing.
Audit Manual is the primary source of authoritative literature for the performance of government audits. This is issued by the Auditor General Office and is widely used reference by all Malaysian government auditors and CA auditors. Audit manual describe financial auditing as audits of financial statements of governmental units, government contracts and grants, internal control, fraud, and other noncompliance with laws and regulations.
12.1.1 Audit Act 1957
Now, we will look into the Audit Act 1957 which provides the responsibility of the Auditor General to audit several accounts is shown in Figure 12.1.
Figure 12.1: Audit Act 1957 provides the responsibility of the auditor general to audit several accounts
The Act also requires the recipient of federal financial assistance should also be audited. This include company registered under the Companies Act 1965 which has more than half of its paid-up capital held by the Federal Government, state or public authority. However, the audit can be performed by the government auditors or by ...
... middle of paper ...
...nal audits than for financial audits because accuracy is not the purpose of most operational audits.
Reporting and Follow-Up
• The audit report is usually sent only to management for operational auditing, with a copy to the unit being audited.
• Each report will address the scope of the audit, findings, and recommendations.
• Follow-up is common in operational auditing when recommendations are made to management. The purpose is to determine whether the recommended changes were made, and if not, why.
• This topic discussed government auditors and the auditing and reporting requirements under government auditing standards.
• Operational audits of the efficiency or effectiveness of a company or government unit is also discussed since internal auditors, governmental auditors and CA firms are also increasingly asked to perform this audit engagement.
SEC has a significant influence on the audit of Smackey Dog Food, Inc because it sets certain auditing standards that need to be adhered to while conducting and audit of any organization. One of the standards is ensuring a professional independence of auditors as they carry out their audit. Keller CPA would be more objective in their opinion by maintaining independence in all maters and be free from conflict of interest in performing their professional engagement. Thus, although SEC does not possess direct control over privately held companies like Smackey, it, however, sets up generally accounting principles and disclosure requirements for all auditors to follow in order to prevent fraud and misstatement and to ensure fairness to users of audited financial statements for investment purposes or decision making. Therefore, Keller CPA would be required to follow the six generally accepted auditing standards established by ASB of the AICPA with regards to field work and reporting which were established through the influence of SEC.
In order to ensure an organization’s financial order, auditors with international standards are a vital part. However, very few auditing companies exist in Afghanistan that can provide auditing services in compliance with international accounting standards. Fortunately, ACC is one of those few auditing firms that can confidently say that its auditing services are in the highe...
Rittenberg, Larry, Bradley Schwieger, and Karla Johnstone. Auditing. 6th ed. Mason: Thomas South-Western, 2005. 10-40.
The stereotypical image correlated to the account mirrors that of a public accountant. An individual working as a public accountant can expect to work as an independent third party to a multitude of companies. As this third party it is their duty to oversee financial transactions to ensure that the statements of not only the company, but also its’ supporting companies, correctly correspond and match up to the position, results and cash-flow of the clientele. This general quota outlining a public accountants job description is not the same for a private accountant. The main difference between a public and private accountant is that unlike the public and its handle on a multitude of accounts, a private accountant specializes with a certain company or field. With this specialization, a private accountant tackles setting up a system that records the transactions within the business. The recordation of the transactions is then generated into statem...
Assess the responsibility of audit committees as well as internal auditors in relation to the Satyam scandal.
With every business activity come opportunities for fraudulent behavior which leads to a greater demand for auditors with unscathed ethics. Nowadays, auditors are faced with a multitude of ethical issues, and it is even more problematic when the auditors fail to adhere to the standards of professional conducts as prescribed by the American Institute of Certified Public Accountants (AICPA). The objective of this paper is to analyze the auditors’ compliance with the code of professional conduct in the way it relates to the effectiveness of their audits.
Also it is very important to see within these areas if company has the accurate audit trail by tracking the financial data from the general data to the source of the financial transaction with specific documentation.
The ‘deficient standards gap’ refers to situations when the auditors are not required by the standards to report certain issues, whilst its counterpart refers to situations when auditors have not complied with the existing standards. This dissection is particularly important when I look at each of the problems separately later on and look for the respective solutions. The beginning Since the early 1970s, the auditing profession has been under increased pressure and scrutiny by government and users of audit reports. The phrase, ‘Audit Expectations Gap’ was first coined when the AICPA put the Cohen Commission together in 1974 to investigate whether the ‘expectations gap’ existed. However, the history of the expectation gap goes right back to the start of company auditing in the nineteenth century (Humphrey and Turley 1992).
An auditor needs to follow, abide and comply with the standards, rules and regulations of their profession, as these will help the auditor to recognize when independence and objectivity are compromised. Works Cited Gray, Iain and Stuart Manson. The Audit Process: Principles, Practice and Cases. London: Thomson Learning, 2008. Print.
Accounting ethics has been difficult to control as accountants and auditors must keep in mind the interest of the public while that they remain employed by the company they are auditing. The accountants should take into account how to best apply accounting standards when company faces issues related financial loss. The role of accountant is crucial to society. They serve as financial reporters to owe their primary constraint to public interest. The information provided is critical in aiding managers, investors and others in making crucial economic decisions. An accountant is responsible for any fraudulent financial reporting. Some examples of fraudulent reporting are:
Securities Commission Malaysia. (2014). General Section: Audit Oversight Board. Retrieved March 26, 2014, from Securities Commission Malaysia: http://www.sc.com.my/general_section/audit-oversight-board/
...e financial reports and statements are correct. This auditing will be conducted by auditing department of the organization, even may be done by an independent auditor who is not part of the organization, and sometimes public officials are elected. In case of unmatched consequences the organization need to give explanation on the misrepresentation of wrong statements. Auditors purpose is then to ensure that the misrepresentations are corrected, then maintain accurate, reliable financial documents and statements.
The fundamental duty of an external financial auditor is to form and express an opinion on whether the reporting entity’s financial statements are prepared in accordance with the relevant financial reporting framework. In discharging this duty, the auditor must exercise “reasonable skill, care and caution” (Lopes, J. in Kingston Cotton Mill Co 1896) as reflected in current legal and professional requirements.
The evolution of auditing is a complicated history that has always been changing through historical events. Auditing always changed to meet the needs of the business environment of that day. Auditing has been around since the beginning of human civilization, focusing mainly, at first, on finding efraud. As the United States grew, the business world grew, and auditing began to play more important roles. In the late 1800’s and early 1900’s, people began to invest money into large corporations. The Stock Market crash of 1929 and various scandals made auditors realize that their roles in society were very important. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. The auditors’ job became more difficult as the accounting principles changed, and became easier with the use of internal controls. These controls introduced the need for testing; not an in-depth detailed audit. Auditing jobs would have to change to meet the changing business world. The invention of computers impacted the auditors’ world by making their job at times easier and at times making their job more difficult. Finally, the auditors’ job of certifying and testing companies’ financial statements is the backbone of the business world.
Audit is a process to evaluate and review the accounts and financial statement objectively. We can divide it into internal auditors and external auditors. Internal auditors have a inner knowledge of business process. Auditor has access to the much confidential information and all levels of management. But they may lose their judgement and they are not acceptable by the shareholder. “The overall objective of the external auditors is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to report on the financial statements in acco...