This paper Auditing talks that the duties and functions of an auditor involve delicate decision-making process, which has the potential to make or unmake a company. His position in the company requires outmost integrity and confidence since…
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As the report declares the evolution of auditing ethical standards has abdicated the powers governing ethical issues of objectivity from the institutes and placed it in the hands of the ASB, this doesn’t seem to enough to properly control the behaviour of auditors in terms of objectivity and independence. In some cases, the Auditor becomes too financially dependent on the client that it cannot afford to give negative reports regarding the company for fear of losing his/her job. After all, good paying clients are becoming quite scarce nowadays. Other auditors are also providing very profitable advisory services to the client and even go to the extent of deciding for the company instead of merely advising the same.
This discussion stresses that standards be set and properly instituted through statutes to provide effective deterrent to potential violators. The low cost auditing services proves to be a major reason why most auditors are resorting to unethical practices of the profession to augment their income. Standards have to be upgraded in terms of professional fees for auditors to prevent them from becoming too financially dependent to the clients. The decision rendered by the Court on the Caparo Industries plc v Dickman case, it if now very difficult to prosecute the auditor. Two provisions of Civil Law can be used to sue auditors for breach of contract, where the client sues the auditor for giving clean report which the client subsequently feels unjustified, and for tort which can be brought to court by anybody other than the client being audited for breaching their duty.
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Various driving factors and inherent benefits for different companies are proving to be incentives for the organisations towards enhanced financial globalisation. The growing interdependence of developed economies on developing and emerging economies is contributing towards increased globalisation (Hamilton & Quinlan, 2008, p.iv).
In this process, it may happen that the transactions might have occurred after balance sheet date but before the issuance of the financial statement. This affects the financial statements and therefore adjustments are made and properly mentioned in the statements.
In the above problem, Bob has breached the confidentiality principle; this is an ethical principle and legal obligation of discretion which require non disclosure of information except to the client and audit committee about the findings or any material uncovered during the course of audit.
It also includes profitability and protection of the company's assets. This exhibits that the internal control system should first of all meet the objective of accomplishing the company's operational goals and objectives. The second objective of an internal control system is to prepare a reliable and trustworthy financial reporting system.
al public and the accounting profession have had their differences over time on how the auditor should handle the process and what type of information should be reported by auditors to the users of the financial information. The difference between what the public and other
In other words, the procedures may be applied to compare financial information recorded and secured in past, to compare the actual results with initially developed forecasts and targets etc (Internet: allbusiness.com). Indeed, these
The managers present a financial report to the shareholders indicating the performance of the organization within a financial year or within a given period as the shareholders may require. Since the financial statement may
ppointment on the decision to dismiss the current audit firm and believes that since the audit firm was rendering its service for more than 15 years, everyone in the charity was very comfortable with the firm’s auditor. Besides, board members also revealed their concern about
Auditors then study the internal control system of the organization when they finish identifying risks: this system is made of procedures that help to prevent errors, protect assets, and guarantee compliance with
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