Professional Skepticism - Essay Example

Essay Auditing (True and Fair View and Independence).... Today when the words are weapons and satellite their artillery, Audit makes the headline stories in the media; the influx of corporate culture, free market economy has brought auditing to the forefront of Corporate Governance.... hellip; “All the truths are easy to understand, once they are discovered; the point is to discover them” (Galileo Galilee)....

Plain English Movement Dear Ms.... Allen, I thank you for writing to me and enquiring about plain English.... I can understand your curiosity to know about the new movement that is going on for quite some time on the issue of using plain English in our formal and informal communication needs.... hellip; Plain English is a way to express our thoughts in clear, concise and easy language in minimum words....

From an auditor's Professional Skepticism point of view, these risks and developments can have serious implications on the financial reporting and internal controls maintained by the company, since there is a possibility that management may try to manage earnings and overstate the sales revenue and profits of the business.... First of all, there shall be appropriate measures taken to ensure that employee turnover is brought down to a minimal level in order to ensure that experienced and professional staff members are working in the company and therefore the function of financial reporting, in particular, runs smoothly....

To achieve these objectives the auditor has to resort to Professional Skepticism.... To be successful auditors have to develop and exercise Professional Skepticism.... These professional responsibilities are determined by their legitimate economic functions....

Litigation is the expression employed to illustrate proceedings started between two conflicting parties to impose or protect a legal… It is established by agreement between the sides; however, could also lead to impose of punishments in term of fines and censures in case corporations.... In this paper, Ernst & Young incident in 2005, 2006, and 2007 forms the basis of discussion. In 2005, 2006, and 2007 audits The primary subject that led to this case was Ernst & Young did not evaluate the sales returns preserve from the corporation's financial books (PCAOB, 2014)....

Audit risk refers to the risk of an inappropriate audit opinion by the designated and assigned auditor when financial statements are materially misstated (Rittenberg, Johnstone and Gramling, 2012).... However, it may be of two types that is either at financial statement level or at… assertion level, risk at financial statement level means that overall financial statements are adjusted for window dressing while risk at assertion level means that it affect certain class only (Collings, 2012). During the financial year 2013 the company posted a profit of 000 which was a loss of £345000 during the last financial year, which provide that corroborative evidence that financial statement might be materially misstated, following are the risk areas: As clear from income statements figure sales during 2013 has been decreased by £2872000 amount, due to which closing stock should have risen but amount shown in statement of financial position show quite opposite figure that show decrease in inventory, which is a high risk area as both evidence regarding inventory show opposite position, further decrease in accounts payable by such large amount need detailed analysis of this area in order to reduce audit to an level....

The paper “Demonstrating Professional Skepticism” critically examines how the auditors can show Professional Skepticism when carrying out their work.... The paper gathers insights from the recent most research on the requirement that auditors should conduct themselves with Professional Skepticism.... Demonstrating Professional Skepticism The article by Boyle et al.... critically examines how the auditors can show Professional Skepticism when carrying out their work....

The concepts of professional scepticism, which are entirely depended on the perception of the auditors, are influenced by various factors.... The concept of auditor independence and scepticism were both raised with the focus on the nature of responsibilities which a professional needs to abide while ensuring the quality of the financial statements of a company (Kleinman & Et....