StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Contemporary Auditing and Risk Management - Essay Example

Cite this document
Summary
The essay "Contemporary Auditing and Risk Management" focuses on the critical analysis of the major issues in contemporary auditing and risk management. An audit aims to give an opinion regarding whether your combined financial statements are properly presented…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER91.7% of users find it useful
Contemporary Auditing and Risk Management
Read Text Preview

Extract of sample "Contemporary Auditing and Risk Management"

? Contemporary Auditing s: ENGAGEMENT LETTER Loughran and Shrives Chartered Accountants And Sta y Audit Firm April9, 2013 Land Securities Group Plc London, WC2N 5EH, United Kingdom Dear Sirs. The essence of this letter is to provide the foundation on which we practice as auditors of the company and the corresponding areas of obligations of ourselves and of the company. The aim of our audit is to give an opinion regarding whether your combined financial statements are properly presented, in all substantial respects, in conformism with accounting guidelines accepted in the UK. Our audit will be carried out in accordance with auditing principles accepted in the United Kingdom and will comprise tests of your company accounting records and other measures we consider essential to empower us to express an opinion. In the event that our application is not complied with, we ought to cease to act as auditor to your company or to support the company in any revenue or tax matter. We must convey a copy of our resignation to an applicable office of the Revenue Commissioners within 14 days. We ought to report material pertinent offences to the administrator of the company in writing, in a period 6 months. Our costs or fees are calculated on the basis of the period spent on your matters by our staff and partners, and on the levels of expertize and obligation involved and expenses incurred and VAT. We shall not reveal, to potential competitors or third party, confidential information attained in during our professional duty without your permission unless a legal right to disclose. Under the law of our institution, we obliged to avail all documents available for scrutiny in the course of a general practice review. Where the engagement is dismissed the constitutional provisions governing dismissal or termination of auditors in accordance to the Companies Act, shall apply. When we as auditors cease to continue in office, we have an obligation to notify UK Auditing and Accounting Supervisory Consultant within one month after the date of cessation. Once this letter has been approved, it will remain operative, from one audit employment to another, till it is replaced. We shall be thankful if you could sanction in writing your pact to the terms of our engagement letter, by appending your signature and returning copy of this letter, or inform us if they are not in accordance with your comprehension of our terms of appointment. Yours faithfully, _______________________ Loughran and Shrives Chartered Accountants We approve to the terms of this letter. ______________________________________ Signed for and on behalf of Land Securities Group Plc. Ethical Issues for New Clients Leaflet Study Title: Ethical Issues for New Clients Leaflet Firm: Loughran and Shrives Chartered Accountants Client: Land Securities Group Plc Ethical auditing is a procedure which examines the internal and external reliability of a company's values base. The key ideas are that it must be value-linked, and that it integrates a stakeholder method. Its purposes are two-fold: It is envisioned for transparency and accountability towards stakeholders and it is anticipated for internal regulation, to meet the moral objectives of the company. The importance of the moral audit is that it empowers the company to evaluate itself through a diversity of lenses: it incarcerations the company's ethical profile. Compliance with moral requirements involves: independence of a company with ethical standards supporting all stakeholders. Integrity of all the undertakings; where confidentiality, transparency, and accountability upheld. Objectivity and Professional Competence are added values. Our firm has been tested for the above ethical issues and proven fit of all. If you need any additional information now or at any moment in the future, please contact: Name: Address: Phone No: Internal Control and Risk Management Letter The findings of the Cadbury Board provided an outline for corporate control which has become the foundation for the provisions whereby UK companies administer themselves. The Turnbull Reports regulation required corporations to report whether the panel had revised the system of internal control and risk administration, and invigorated, but did not necessitate, the board to prompt an opinion on the efficiency of the system. As in every company, Land Securities Group Plc. faces risk and improbability in everything it does. The company strategy, which is revised on a regular time frame, seeks to exploit on identified prospects while extenuating known downside vulnerabilities. We have implemented adequate internal controls environment to safeguard shareholders’ interest. This is a responsibility that is done by the board to ensure Group’s system of risk management and internal controls are in order. The controls are geared to safeguard the company and shareholders objectives and interest. Determining risk appetite or simple risks we are vulnerable to and risk tolerance or risks we can face during strategy development. Supervising the risk management tactics; and guaranteeing management apply effective systems of threat identification, valuation and extenuation and internal controls. These systems are premeditated to manage, rather than abolish, the threat of failure to attain company objectives and cannot deliver absolute guarantee against material loss. Key features of Land Securities Group Plc’s internal control outline include: clear power delegation which empower each level of management to exercise their appropriate powers. Agreed objectives; which reflect group strategies consider life of business plan, its annual projections and risk tolerance. Agreed ways of working that encompasses conduct of stakeholder in the company. Finally, transparency in every business endeavors. It is evident that Land Securities Group Plc. has complied with the requirements of the United Kingdom Corporate Governance Code regarding internal controls and the pertinent sections of Internal Control: The Turnbull guidance and Guidance on Audit Committees. No substantial weaknesses or quantifiable failings were recognized in the annual review. Management is accountable for maintaining and establishing satisfactory internal controls over economic reporting, counting over the Group’s merging process. A wide-ranging strategic planning, budgeting and projecting system are in place. Monthly monetary report, including trading outcomes and cash flow records, are reported to the Board and administration. Land Securities Group Plc. has an incorporated approach to threat management and internal controls to guarantee that its assessment of risk is used to notify the internal audit procedure and the project of internal controls. The risk controlling process, which has existed throughout the year under evaluation and to the date of endorsement of the accounts, evaluates, identifies, manages and monitors the threats facing the company. The risks that are recognized as significant, in addition to the related mitigating measures, are studied frequently by the Executive Committee also by the Board. The Audit and Risk Committee recurrently reviews the efficiency of the risk identification procedure and the approach used to evaluate and measure the risks, in accordance with the guidance attached to the Code. Risk tolerance is a confirmation of the quantity of risk a corporation is prepared to accept in order to achieve its premeditated objectives. This is replicated in a company’s aptitude to sustain losses and in its capability to endure to meet its obligations under diverse trading conditions. Land Securities Group Plc. has a matrix scoring structure in place in regards to which risks are regarded based on their probability and potential severity. This severity can be considered using health and safety, financial, ecological, stakeholder or legal criteria. AUDIT PLANNING MEMORANDUM FOR REGULATORY AUDIT OF LAND SECURITIES GROUP PLC Table of Contents 1:Objectives of the audit plan 8 2: INTRODUCTION 8 3: ROLES AND RESPONSIBILITIES 8 4: SCOPE OF THE AUDIT 9 5: CLIENT BUSINESS REVIEW AND BACKGROUND ……………………………………12 6: CONTROL RISK ASSESSMENT……………………………………………………………12 7: INTERNAL CONTROL SYSTEMS…………………………………………………………13 8: CONCLUSION: CONTROL RISK ASSESSMENT…………………………………………13 9: PLANNED AUDIT APPROACH…………………………………………………………….14 10: ADMINISTRATION………………………………………………………………………..14 11: APPROVAL…………………………………………………………………………………14 1: Objectives of the audit plan To help as a outline for the audit; To ensure that an operative and effectual audit is done in order to sufficiently report the audit risk; The appropriate identification of the requisite for and role of experts; To relay important material to the audit team; To deliver the expectations and requirement of the administration of the department to the audit team 2: INTRODUCTION This planning memorandum was organized according to the predicted audit policy and is based on accumulative audit knowledge and involvement, as well as significant matters which have come to the attention during auditing. During the planning progression an understanding of the operative of the sector was obtained, including how it is prepared and managed, and how it measures accounting and other material. The planning is a continuous procedure and strategy entails in auditing process. However; it is a process that is subject to change owing to new information, which is new during development. The memorandum must cater for all relevant parties’ interest and concerns are met. 3: ROLES AND RESPONSIBILITIES Terms of reference The auditing is carried out in accordance to the Turnbull Reports regulations and the findings of the Cadbury Board provided an outline for corporate control which has become the foundation for the provisions whereby UK companies administer themselves. Attention will be geared towards: The purpose of the grant Utilization of resources being uneconomical ineffective and does not serve the best interest of the statutory body concerned. The auditor to ensure management and control Responsibilities of the management and auditors The obligation of the accounting personnel is to prepare the economic statements of the company in accordance with “Generally Recognized Accounting Practice” and to submit them to the Auditor-General, within 2 months before end of year. Financial declarations shall include the following: Income statement; Balance sheet; Statement of changes in equity; Cash flow statement; The accountability of the Auditor-General is to audit the economic statements and give an audit opinion in accordance with United Kingdom Auditing Standards. 4: SCOPE OF THE AUDIT Audit report required A submission of the Auditor-General on the yearly financial declarations of Land Securities Group Plc. or submission to Audit-committee is required. All materials raised in the former year's financial reports will be followed up and conveyed on if necessary. Extent of report A regularity inventory will be carried out and will involve mainly of a self-governing evaluation of the following: The level to which the economic declarations fairly present the events of the company for the year. The accurateness, quality and extensiveness of the accounting accounts kept Confirmation that sanctioned expenditure is validated by sufficient and acceptable certification Confirmation that adequate and appropriate internal control processes are in place and upheld. These joysticks include employer controls as well as overall and programmed controls in the electronic information systems situation. Conformation that the internal audit job is effective and well-organized and could be trusted on by the Bureau of The Auditor-General Compliance with principles, policies, acts and other orders applicable to financial issues Amenableness with the financial control procedures Elements of a regularity audit The audit will be carried out in accordance with Statements of United Kingdom Auditing Standards. Those standards necessitate that the assessment be planned and executed to obtain sensible assurance that the economic statements are free of factual misstatement. An audit includes: Examining, on a experiment basis, confirmation supporting the quantities and disclosures in the economic statements, Evaluating the accounting values used and substantial estimates made by administration, and evaluating the general financial statement exhibition. Moreover, an audit includes an inspection, on a test specimen, of evidence secondary compliance in all physical respects with the pertinent laws and principles that came to the auditors’ responsiveness and are pertinent to financial matters Financial management The Constitution of Accountancies ethic declares that the Auditor-General ought to audit and report on the accounts, fiscal statements and monetary administration of companies. This delivers the mandate for the auditing officers to specifically attention on financial organization. Subsequent research piloted by the Office of the Auditor-General a tactic for auditing financial management has been approved. This method is detailed below and fundamentally involves assessing institutions against prearranged levels of financial administration in terms of the monetary management competence model. This will permit for measuring over time whether monetary management is refining within a company, and for the organization to be benchmarked against other competitors. In the early stages this may proceed to an upsurge in the audit capitals to measure financial management. However, being capable to assign details for shortcomings in the monetary management procedure (and consequently in terms of interior controls), will be of a substantial value to the company. It will allow the identification of the source of underlying difficulties in the company that have certain rise to audit recording issues. Furthermore, company wills contribution the audited in focusing capitals that will ultimately enable the accountants to rely on the organizations and thus decrease the audit resources essential in the average term. 5: CLIENT BUSINESS REVIEW AND BACKGROUND Nature and overall objective of the Company This is a section of the memorandum that gives the details of the company This entails; Background information The Company address is: London, 5 Strand, WC2N 5AF, UK Company website: http://www.landsecurities.co.uk Market capacity in millions: ? 6,684.52 Listing/Admission to trading: 6th Sep, 2002. Mission statement Our Vision ‘As landlords and developers, our participation in large-scale and complex property schemes lasts for numerous years. By capitalizing, not just in structures but in well-integrated and lasting occupation, training and skills opportunities, we aim to make societies stronger and more sustainable.’ Our Mission ‘By working in corporation we will achieve and deliver an Employment Strategy that supports the long period economic feasibility of our developments, by posing local training chances, developing people’s abilities and creating sustainable jobs.’ Objectives Objective is to achieve the vision and mission of the company. Business Activities and Location Postal Address Physical address Offices Contact person Accounting Systems and financials statements 6: CONTROL RISK ASSESSMENT The regulator environment encompasses the general attitude, mindfulness and actions of organization concerning the internal control organization and its reputation in the entity, and includes administration’s control systems. Budgetary control Audit committee: The audit group has been essential in complying with the principles as illustrated in the Audit Committee Charter. 7: INTERNAL CONTROL SYSTEMS The risks recorded below include both conceivable risks, acknowledged during the documentation of the auditing systems that are available in the company, as well as definite risks, recognized and stated on in the prior year’s organization letter. This is a key aspect and measure for any auditing activities since the goal is to ensure the stakeholders’ safety is upheld. 8: CONCLUSION: CONTROL RISK ASSESSMENT Overall risk assessment: Risks are challenges of every business or company. Assessment is vital for the company to be able to manage their risks and achieve the objective of the company. The aim of an overall risk assessment is to evaluate the threats of any activity or duty in the workplace. This valuation is carried out to avoid any accident or damage taking place in the future. Inherent risk assessment: risk tolerance assessment 9: PLANNED AUDIT APPROACH The auditing is carried out in accordance to the Turnbull Reports regulations and the findings of the Cadbury Board provided an outline for corporate control which has become the foundation for the provisions whereby UK companies administer themselves. 10: ADMINISTRATION Auditing steering Committee: expert handling the process and determining the scope Target Dates Audit fee Audit team and current year 11: APPROVAL This is the section to determine whether audit team has a mandate to carry out the process. 12: QUESTIONS Appropriate questions are developed prior to the actual auditing. This is one of the control measures to assist the participants to restrict their actions to the intended purpose. References Albrecht, W. S. 1992, Ethical Issues in the Practice of Accounting, South-Western Publishing, Cincinnati, OH. Bentham, J. 2009, Introduction to the Principles of Morals and Legislation, Basil Blackwell, Oxford. Clarke, F. L., Dean, G. W. & Oliver, K. G. 1997, Corporate Collapse – Regulatory, Accounting and Ethical Failure, Cambridge University Press, Melbourne. Read More
Tags
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Contemporary auditing and risk management Essay”, n.d.)
Retrieved from https://studentshare.org/finance-accounting/1404304-contemporary-auditing
(Contemporary Auditing and Risk Management Essay)
https://studentshare.org/finance-accounting/1404304-contemporary-auditing.
“Contemporary Auditing and Risk Management Essay”, n.d. https://studentshare.org/finance-accounting/1404304-contemporary-auditing.
  • Cited: 0 times

CHECK THESE SAMPLES OF Contemporary Auditing and Risk Management

Issues in Contemporary Auditing

Additionally, an audit report of the company is also conducted by following the guidelines of the International Standard on Auditing (ISA) which is authorized by the International auditing and Assurance Standards Board (IAASB).... The aim of the current essay "Issues in contemporary auditing" is to explore the ethical Issues related to the provision of audit as well as non-audit services.... Therefore, the writer of the essay will critically analyze the audit management planning at certain organizations....
13 Pages (3250 words) Essay

Issues in Contemporary Auditing

They have not limited themselves to ISA only rather they have taken into an account the workings of international auditing standards which are accredited under The International auditing and Assurance Standards Board (IAASB).... From the paper "Issues in contemporary auditing" it is clear that there are majorly five operating segments that are being followed by the KAZAKHMYS.... n the context of impartiality, auditors who scrutinize the management of quality control can be bargained about their powerful economic ties....
12 Pages (3000 words) Essay

Issue in contemporary auditing

Issue in contemporary auditing Letter of Engagement Land Securities Group Plc.... Restriction on Audit Liability Due to the characteristics of audit and other inherent restrictions, there is always inevitable risk of financial mistreatments to remain undiscovered (Financial Reporting Council, 2012).... I will be individually responsible for the auditing tasks and I can certify you that the service you would obtain from us would be of highest quality....
12 Pages (3000 words) Essay

Contemporary Auditing

The assignment 'contemporary auditing' presents the auditors who should not compel their client(s) to accept every proposed audit adjustments, including immaterial misstatements.... If the employees or management discover that the materiality threshold to be applied, they can use it to manipulate the system, accounts, or records because they will be aware of what the auditors are looking for in the documents and system.... Question 5: Incompetency with the management team increases the probability of inherent risks within the audit....
1 Pages (250 words) Assignment

Materiality in Auditing

Materiality becomes relevant in auditing when risk emerges.... his risk usually stems from errors or omissions in financial reporting.... For instance, a small error or omission in a periodic procedure could lead to a cumulative risk that could greatly influence the financial information since there is the possibility that it occurs on a periodic basis.... Specifically, it should be undertaken in: 1) the design of audit procedures for mechanisms to detect misstatements; the pursuit of the elimination of audit risk; and, the assessment of the risk of material misstatement as to the basis for the audit procedures (Bragg, pp....
7 Pages (1750 words) Essay

Auditing Practices, Professionalism, Ethics, And Standards

The paper "Auditing Practices, Professionalism, Ethics, And Standards" critically discusses the contemporary auditing practice and its flaws with particular focus to the professional ethics regarding auditor independence and a critique of the relevant standards.... Although some experts have argued that auditing firms may still be able to legitimize their status by appealing to and incorporating professionalism in their practice, this is often difficult as they are often motivated to increase their profits and market niches just like other capitalist enterprises....
8 Pages (2000 words) Essay

Audit Risk and Substantive Audit Procedures

his usually comes due to the independence of the auditor being compromised by the management of the organization and other factors.... Audit risk refers to the risk that an auditor may express an unqualified opinion on the financial statements that does not reflect the actual value of the financial statements provided in relation to the financial position of the organization under audit.... The paper 'Audit risk and Substantive Audit Procedures' is an impressive example of a finance & accounting term paper....
7 Pages (1750 words) Essay

Auditing and Assurance - Lakeside Company

The paper "auditing and Assurance - Lakeside Company" is a perfect example of a finance and accounting case study.... The paper "auditing and Assurance - Lakeside Company" is a perfect example of a finance and accounting case study.... The paper "auditing and Assurance - Lakeside Company" is a perfect example of a finance and accounting case study.... According to international auditing standards, the use of previous data for industry in trying to arrive at the actual figure of a particular accounting element is a method with a high probability of certainty (IAASB, 2007a)....
8 Pages (2000 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us