Financial Statement Audits, Operational Audits, and Compliance Audits - Essay Example

Content Page: Concept of Going Concern: 3 Going concern assessment: 4 Impact of Going Concern on Financial ment: 5 Audit procedure to establish Going Concern in Banking Sector: 6 Asset approach: 6 Market approach 7 Discounted cash flow approach 7 Formula approaches 8 Impact of Going Concern on Financial statement: 9 Answer to the question no-2: 14 Tangible and intangible assets of a bank: 23 Bibliography: 27 Audit Framework: The term “audit” is derived from the Latin word “audire” which refers “to hear”. Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria. Certified public accountant (CPA) performs three categories of audits: financial statement audits, operational audit and compliance audits. Financial statement audit is an audit conducted to determine whether the overall financial statements of an entity are stated in accordance with specified criteria (usually generally accepted accounting principles). Operational audit a review of any part of an organization’s operating procedures and methods for the purpose of evaluating efficiency and effectiveness. And compliance audit – 1. A review of an organization’s financial records performed to determine whether the organization is following specific procedures, rules, or regulations set by some higher authority. 2. An audit performed to determine whether an entity that receives financial assistance from the federal government has complied with specific laws and regulations. Auditing process is considerably broader than the definition of an audit of historical financial statements and encompasses many attestation and assurance service activities. Definition of auditing is also includes several key words and phrases. In auditing accounting data, the concern is with determining whether recorded information properly reflects the economic events that occurred during the accounting period. Because accounting rules are the criteria for evaluating whether the accounting information is properly recorded, any auditor involved with these data must also thoroughly understand those rules. To do an audit, there must be information in a verifiable form and some standards (criteria) by which the auditor can evaluate the information. Information can and does take many forms. Auditors routinely perform audits of quantifiable information, including companies’ financial statements and individuals’ federal income tax returns. Auditors also perform audits lf more subjective information, such as the effectiveness of computer systems and the efficiency of manufacturing operations. This is a case study for auditing Southern Rock, a high street UK Bank, registered in Southampton. Here audit partner in the firm is “APMC Auditors” has provided some questions to answer. Answers of the given questions are answered as bellow respectively: Answer to the question no-1: Concept of Going Concern: The “going concern” perception is one of the regulatory foundation stone of the financial accounting arena. The spirit of going concern express that the Balance Sheet of a company must be an echo the weight of that company as if it would stay in existence for and beyond the predictable future. In other words, the going concern concept also states that the company would be file for bankruptcy within one year from the date of Balance Sheet. This paper would go to analyse the going concern concept and its vital focus to a rational observation of Southern Rock Plc. a Banking company as far as possible. It would discover the Impact of Going Concern on Financial statement and Audit procedure to establish Going Concern in Banking Sector as well as the liquidation value of a company and its asset. Going concern assessment: There are two major parties in the assessment of a company as a going concern, they are the company’s management and its auditors. In addition, the following factors may lead to a going concern reconsideration. The list of who makes a going concern evaluation could be possibly include a major creditor; a banker or financier and the considerable factors are: The extensive operation losses incurred in the existing year There is uninterrupted accessibility of trade credit It exist Potential litigation scope There would be possible loss of a foremost customer The prospective patent sale and the current ratio near to the loan agreement limit Impact of Going Concern on Financial Statement: The ‘Presentation of Financial Statements’ clause of 1997 of IAS (International Accounting Standard)-1 has designed the managements dependability for evaluating going concern as follows: To get ready a financial statements, management would be supposed to construct an appraisal of an venture’s capability to persist as a going concern. The Financial statements should be supposed to equipped on a going concern basis. Until and unless management moreover proposes to liquidate the venture to cease trading. It has no down-to-earth alternative other than to do so. If the management is attentive of material reservations that possibly will transmit momentous doubt on the enterprises capability to carry on as a going concern. The suspicions would be disclosed as well. The financial statements are not equipped on a going concern basis. The fact should be relate together with the groundwork on which the financial statements are arranged and the motivation why the venture is not taken into consideration to be a going concern. To evaluate if the going concern supposition is suitable, management are argued to take into account all obtainable information faced to the predictable future that should be at least twelve months on or after the balance sheet date. The International Standard on Auditing in their introduction draft on the Going Concern code, explained a wide-ranging view of it. The ISA has discussed the responsibility both of the management of the corporation as well as auditors. Audit procedure to establish Going Concern in Banking Sector: There are assortment of valuation approach in a business evaluator wouldl consider in the valuation of a company. Among them the most common are as- Asset approach, Market approach, Discounted cash flow approach Formula approaches In authentic practice the amalgamation of approaches is usually used with reverse weights given to every selected approach where appropriate. Asset approach: The asset approach emphasis on the companys adjusted book value through replacement of the fair market value of assets as well liabilities for the confirmed value of assets and liability. This framework is most constructive for valuing an enterprise that has considerably underestimated assets. It might also be positive for assessment a company along with considerable non-operating assets such as land and natural resources available. This framework is usually not used to valuate the company as a going concern. Market approach The market approach framework is very simple for the quoted company. It required just to take in to account the stock market value of that company at the appropriate date and multiply the amount by the number of shares. On the other hand, what would be about the private companies those who are not quoted in any stock exchange. Thus these type of shares are very difficult to value them. To solve such problem, it needs to come across one or more public companies that is likely comparable to the private company who would be valued. To apply this framework it must be compared the private company with the public companies in basis of size, gearing growth to settle on relative risk. Discounted cash flow approach The framework of discounted cash flow approach formed on several year protuberance pedestal on managements sensible estimates on the companys prospects. The rationality of protuberance should be measured by contrast to the companys chronological results as well as the outlook of the company and its industry. The predictable cash flow would be calculated by depreciation to incomes to depreciation and take off capital costs minus or plus changes among working capital. The terminal value would be calculated at the closing stages of the projection period. The suitable discount rate might be on the company’s hurdle rate. It is pedestal on the weighted average cost of capital of the company. The risk premium possibly will be added with the discount rate where appropriate with the circumstances to conclude a risk-adjusted discount rate. Formula approaches The framework of formula approach possibly will be considered if apposite site. The formula would take a lot of forms such as a multiple of revenues or multiple of book value. Advantage of applying the formula approach is that it is quite simple and reasonably priced to apply. On the other hand disadvantage of applying is that, it possibly will not reproduce fair market value. In addition, the formula possibly will not be dynamic enough to reproduce shifting market state of affairs in which a company operates. From above discussion, any of the approaches would be needed to be more adjusted to explanation for qualitative factors in particular situation such as rational management compensation and non-recurring gains or losses as well as non-operating assets. Impact of Going Concern on Financial statement: To determining the value of a business is the most difficult feature of every transaction reasoning that every business is unique from its own perspectives. The common mistaken belief is that estimation is an exact science. At the same time as the use of formulas in a valuation procedure involves accuracy. It is quite difficult to position the worth of a company by a single figure. To ascertain a fair market value, hard statistics such as assets and liabilities as well as cash flow and historical earnings are used. In the Financial statement the subjective figures as future cash flow, projected earnings and value of intangibles are also used. The relevant issues are patents, the quality of management, know-how and leases at below-market rates are notable. On the other hand soft facts are also consist the industry popularity, current market conditions and most significant objectives are the seller or buyer at all this subjectivity as well as fair market value would be the only a range of estimates. The concluding selling price can be either advanced or even lower than the predictable range of values for the company based on the factors as - enthusiasm of the buyer and seller stipulate for the type of company, outward appearance of consideration paid, bargain skills of the parties and so on The selling price of a company from time to time does not appear to have a good deal relation with its estimated value. Furthermore it would ask to appraisers the value of a business and it would respond, What would be the purpose of the valuation? Just to sell it as a going concern. To sell out it on the basis of liquidation as well as selling on a break up basis. There are different techniques could be applied to turn up at different values. Significantly each of the values might be correct for a explicit situation. To valuing a business pedestal on the estimation techniques are applied to buying or selling a company as a going concern. Whichever technique is used, the valuation comprises these key elements: gathering information about the company and the industry; recasting the historical financial statements; preparing prospective financial statements; comparing the companys results with those of other companies in the industry; and, Applying appropriate valuation methodologies. We have already seen some of what Deloitte and Touche have to say about valuing a business above; but their section on recasting, or adjusting, financial statements is new and interesting; and some of their ideas follow. We should bear in mind, however, that if we tried to apply these ideas in anything other than a considered and serious manner, we would have severe difficulties. Adjustments to the Income Statement can include: Excessive salaries: paid to individuals who can be replaced at much lower salaries Excessive perquisites, such as company cars and club memberships Favorable or unfavorable leases Interest rates if the buyer borrows at significantly different rates Nonrecurring expenses, such as legal expenditures, relocation costs Accelerated depreciation charges, used to reduce taxable income "Window dressing" or practices that temporarily improve current earnings. For instance, a company might reduce necessary long-term investments, such as research, advertising, or maintenance, improving its current earnings but weakening its potential for future earnings Tax rates. If the company has an unusual tax situation, e.g, available net operating loss (NOL) carry forwards, an adjustment should be made to reflect "normal" taxation Some typical Balance Sheet adjustments may include the following: Undervalued or overvalued marketable securities, Fixed assets that have appreciated, Intangible assets that may not be recorded on the books, Unrecorded pension and other postretirement liabilities, Contingent liabilities. After identifying and quantifying applicable adjustments, you will have a more meaningful set of financial statements to use to make financial projections and to compare the companys performance with that of other companies. Whichever technique is used, the valuation comprises these key elements- gathering information about the company and the industry; preparing prospective fiscal statements; recasting the historical fiscal statements; comparing the companys results with those of other companies in the industry; and, Applying appropriate valuation methodologies. Adjustments to the Income Statement can include: Some times excessive salaries have been paid to directors or employees who can be replaced at much lower salaries. They get excessive gratuity, for example company cars and club memberships, Directors or employees achieve favorable or unfavorable leases and take undue advantages such as interest rates. The interest rates are high where the buyer borrows, Nonrecurring operating cost, for instance legal expenditures and relocation costs, speed up the depreciation charges, used to decrease taxable income “Window dressing” or practices that temporarily advance current earnings. For example, a company might decrease essential long-term investments, for instance research, advertising, or maintenance developing its current earnings but weakening its potential for future earnings Tax rates. If the group has an unusual tax condition, e.g., available net operating loss (NOL) carry forwards, an modification should be made to reflect normal taxation. Some typical Balance Sheet adjustments may include the following: The undervalued or overvalued marketable securities, The intangible assets which might not be recorded on the books, The fixed assets which have appreciated, The contingent or conditional liabilities, Unrecorded pension and additional postretirement responsibilities, After identifying and quantifying applicable adjustments, it would have a more meaningful set of financial statements to use to make financial projections and to compare the companys performance with that of other companies. Answer to the question no-2: A system of internal control consists of policies and procedures designed to provide management with reasonable assurance that the company achieves its objectives and goals. These policies and procedures are often called controls, and collectively they comprise the entity’s internal control. In short, internal control is a process designed to provide reasonable assurance regarding the achievement of management’s objectives in the following categories: a. reliability of financial reporting b. effectiveness and efficiency of operations, and c. compliance with applicable laws and regulations. To strength internal control system of a company requires internal control questionnaire- a series of questions about the controls in each area used as a means of indicating to the auditor aspects of internal control that may be inadequate. The absence of adequate controls; an internal control weakness increases the risk of misstatements in the financial statements. Importance of a robust internal control mechanism for a bank An understanding of internal control, especially those controls related to the reliability of financial reporting, are important to auditor’s purposes. As a financial institution or organization a bank need to use several mechanism for a sound internal control. Contrast management’s need for internal control with the auditor’s need to consider internal control when designing an audit. Importance or significance of robust internal control mechanism for a bank expressed as bellow- A. Management’s responsibility: Management, not the auditor, must establish and maintain the entity’s controls. This concept is consistent with the requirement that management, not the auditor, is responsible for the preparation of financial statements in accordance with GAAP (General Accepted Accounting Principles). B. Reasonable assurance: A bank should develop internal controls that provide reasonable, but not absolute, assurance that the financial statements are fairly stated. Internal controls are developed by management after considering both the costs and benefits of the controls. Management is often unwilling to implement an ideal system because the costs may be too high. C. Inherent limitations: Internal controls can never be regarded as completely effective, regardless of the care followed in their design and implementation. Even if systems personnel could design an ideal system, its effectiveness depends on the competency and dependability of the people using it. D. Controls over classes of transaction: The primary emphasis by auditors is on internal control over classes of transactions rather than account balances. The reason is that the accuracy of the output of the accounting system (account balances) is heavily dependent on the accuracy of the inputs and processing (transactions). For example, if products sold, units shipped, or unit selling prices are wrong in billing customers for sale, both sales and accounts receivable will be misstated. If controls are adequate to make sure billings, cash receipts, sales returns and allowances, and charge-offs are correct, the ending balance in accounts receivable is likely to be correct. E. Proper authorization of transactions and activities: Every transaction must be properly authorized if controls are to be satisfactory. Authorization can be either general or specific. General authorization means that management establishes policies for the organization to follow. Subordinates are instructed to implement these general authorizations by approving all transactions within the limits set by the policy. Specific authorization applies to individual transactions. For more clarification importance of internal control mechanism for a bank can be shown as following table: Preplan Obtain background information Obtain information about client’s legal obligations Perform preliminary analytical procedures Set materiality, and assess acceptable audit risk and inherent risk Understand internal control and assess control risk Develop overall audit plan and audit program Ways of proper efficient and effective controls that satisfy an auditor Controls within a bank are meant to encourage efficient and effective use of its resources, including personnel, to optimize the company’s goals. An important part of these controls is accurate information for internal decision making. A variety of information is used for making critical business decisions. For example, the price to charge for products is based in part on information about the cost of making the products. Another important part of effectiveness and efficiency is safeguarding assets and records. The physical assets of a company can be stolen, misused, or accidentally destroyed unless they are protected by adequate controls. The same is true of nonphysical assets such as accounts receivable, important documents (confidential government contracts), and records (general ledger and journals). Safeguarding certain assets and records has become increasingly important since the advent of computer systems. Large amounts of information stored on computer media can be destroyed if care is not taken to protect them. Safeguarding of accounting records also affects the reliability of financial reporting. Effective and efficient internal control includes several categories of control that management designs and implements to provide reasonable assurance that management’s control objectives will be met and also satisfy an auditor. They are- i) The control of environment- The control environment consists of the actions, policies, and procedures that reflect the overall attitudes of top management, directors, and owners of an entity about internal control and its importance to the entity. For the purpose of understanding and assessing the control environment or the essence of an effectively controlled organization lies in the attitude of its management. Because if top management believes that control is important, others in the organization will sense that and respond by conscientiously observing the controls established. ii) Integrity and ethical values- Integrity and ethical values are the product of the entity’s ethical and behavioral standards and how they are communicated and reinforced in practice. They include management’s actions to remove reduce incentives and temptations that might prompt personnel to engage in dishonest, illegal, or unethical acts. They also include the communication of entity values and behavioral standards to personnel through policy statements and codes of conduct and by example. iii) Commitment to competence- Competence is the knowledge and skills necessary to accomplish tasks that define the individual’s job. Commitment to competence includes management’s consideration of the competence levels for specific jobs and how those levels translate into requisite skills and knowledge. iv) Board of directors or audit committee participation- An effective board of directors is independent of management, and its members are involved in and scrutinize management’s activities. The board delegates responsibly for internal control to management and is charged with providing regular independent assessments of management-established internal control. An active and objective board can often effectively reduce the likelihood that management overrides existing controls. To assist the board in its oversight, the board often creates an audit committee that is charged with oversight responsibility for the financial reporting process. The audit committee is also responsible for maintaining ongoing communication with both external and internal auditors. This allows the auditors and directors to discuss matters that might relate to such things as the integrity or actions of managements. v) Management philosophy and operating style: Management, through its activities, provides clear signals to employees about the importance of internal control. For example, does management take significant risks, or are they risk averse? Are profit plans and budget data set as “best possible” plans or “most likely” targets? Can management be described as “fat and bureaucratic”, “lean and mean’, dominated by one or a few individuals, or is it “just right”? Understanding these and similar aspects of management’s philosophy and operating style gives the auditor a sense of management’s attitude about internal control and also reflects the efficient and effective control through this way. vi) Organizational structure: The entity’s organizational structure defines the existing lines of responsibility and authority. By understanding the client’s organizational structure, the auditor can learn the management and functional elements of the business and perceive how controls are implemented. Another way to satisfy auditor for their efficient and effective controls. vii) Assignment of authority and responsibility: To the formal aspects of communication, formal methods of communication about authority and responsibility and similar control- related matters are equally importance of control and control-related matters, formal organizational and operating plans, and employee job descriptions and related policies are alternative way to efficient and effective control that satisfy an auditor. viii) Human resource policies and practices: The most important aspect of internal control is personnel. If employees are competent and trustworthy, other controls can be absent and reliable financial statements will still result. Honest, efficient people are able to perform at a high level even when there are few other controls to support them. Even if there are numerous other controls, incompetent or dishonest people can reduce the system to a shambles. Even though personnel may be competent and trustworthy, people have certain innate shortcomings. For example, they can become bored or dissatisfied, personnel problems can disrupt their performance, or their goals may change. Because of the importance of competent, trustworthy personnel in providing effective control, the methods by which persons are hired, evaluated, trained, promoted, and compensated are an important part of internal control. The auditor obtains information about each of the subcomponents of the control environment. The auditor then uses this understanding as a basis for assessing management’s and the directors’ attitude and awareness about the importance of control and also judge the ways of proper efficient and effective controls that satisfy him. Aforesaid are the several ways that can be fulfilled an auditors requirement when identifying efficient and effective internal controls. Answer to the question no-3: The auditor has the responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud. Because of the nature of audit evidence and the characteristics of fraud, the auditor is able to obtain reasonable, but not absolute, assurance that material misstatements are detected. The auditor has no responsibility to plan and perform the audit to obtain reasonable assurance those misstatements, whether caused by errors or fraud, that are not material to the financial statements are detected. To manage an audit within banking sector responsibilities of the lead auditor Within banking sector responsibilities of an auditor are basically of four types. Each of these has several parts. A brief description of these responsibilities described as bellow- A. Auditor’s responsibilities for detecting material errors: Auditors spend a great portion of their time planning and performing audits to detect the unintentional mistakes made by management and employees. Auditors find a variety of errors resulting from such things as mistakes in calculation, omissions, misunderstanding and misapplication of accounting standards, and incorrect summarizations and descriptions. B. Auditor’s responsibilities for detecting material fraud: Auditing standards make no distinction between the auditor’s responsibilities for searching for errors and fraud, whether from fraudulent financial reporting or misappropriation of assets. For both errors and fraud, the auditor must obtain reasonable assurance about whether the statements are free of material misstatements. The standards also recognize that it is often more difficult to detect fraud than errors because management or the employees perpetrating the fraud attempt to conceal the fraud. The difficulty of detection does not change the auditor’s responsibility to properly plan and perform the audit. An important part of planning every audit is to assess the risk of errors and fraud. The discussion that follows deals only the risk assessment requirements for fraud outlined in “Statements on Auditing Standards (SAS) 82. In making a risk assessment for fraud, it is useful to keep in mind that fraud typically includes two characteristics. The auditor’s risk assessment for fraud focuses on both of these two characteristics, which are as follows: 1. Pressure or incentive to commit the fraud: Often, this pressure is a desire for direct financial gain in the case of misappropriation of assets or an indirect gain in the case of fraudulent financial reporting. The gain in the second case may be, for example, an increase in the market value of company shares held by management. 2. Perceived opportunity to commit the fund: Even though there is an incentive to commit fraud, it is unlikely to occur unless the individual or individuals involved believe they can do so without being detected. C. Assessing risks of fraud: An important part of SAS 82 is the requirement that auditors specifically assess the risk of material misstatement due to fraud. The risk factors for fraudulent financial reporting are different than those for misappropriation of assets because the nature of the fraud is different. For fraudulent financial reporting, three categories of risk factors are identified in SAS 82. For each category, the standard includes examples of these risk factors to provide guidance to practitioners. D. Auditor’s responsibilities for discovering illegal Acts: Illegal Acts are defined in SAS 54 (AU 317) as violations of laws or government regulations other than fraud. Two examples of illegal acts are a violation of federal tax laws and a violation of the federal environmental protection laws. They are- a. Direct-effect illegal Acts- Certain violations of laws and regulations have a direct financial effect on specific account balances in the financial statements. The auditor’s responsibilities under SAS 54 for these direct-effect illegal acts are the same as for errors and fraud. On each audit, therefore, the auditor will normally evaluate whether or not there is evidence available to indicate material violations of federal or state tax laws. This might be done by discussions with client personnel and examination of reports issued by the Internal Revenue Service after they have completed an examination of the client’s tax return. b. Indirect-effect illegal Acts: Most illegal acts affect the financial statements only indirectly. For example, if the company violates environmental protection laws, there is an effect on the financial statements only if there is a fine or sanction. Potential material fines and sanctions indirectly affect financial statements by creating the need to disclose a contingent liability for the potential amount that might ultimately be paid. This is called an indirect-effect illegal act. Auditing standards clearly state that the auditor provides no assurance that indirect-effect illegal acts will be detected. Auditors lack legal expertise, and the frequent indirect relationship between illegal acts and the financial statements makes it impractical for auditors to assume responsibility for discovering those illegal acts. Answer to the question no-4: Tangible and intangible assets of a bank: To describe audit assertion and uses of audit assertions in case of a bank’s tangible and intangible assets first of all it is essential to know about “audit assertion” and the list of “tangible and intangible assets” of a bank. To do so list of tangible and intangible assets of a bank is listed in following table- Tangible assets of a bank Intangible assets of a bank Land Buildings Delivery equipments Furniture and fixtures Goodwill Information and ideas Cash in bank Accounts receivable Notes receivable Owned inventory out on consignment Inventory held in public warehouses Cash surrender value of life insurance Description of audit assertion and uses of assertions while auditing “tangible” and “intangible” assets of a bank Audit assertions are implied or expressed representations by management about classes of transactions and the related accounts in the financial statements. In case of bank presented in the bank’s accounts or on the premises as of the balance sheet date. Unless otherwise disclosed in the financial statements, management also asserts that the cash was unrestricted and available for normal use. Similar assertions exist for each asset, liability, owners’ equity, revenue, and expense item in the financial statements. These assertions apply to both classes of transactions and account balances. Audit assertions are directly related to generally accepted accounting principles (GAAP). These assertions are part of the criteria that management uses to record and disclose accounting information in financial statements. Auditors must therefore understand the assertions to do adequate audits. SAS 31 (AU 326) classifies following assertions while uses of assertions while auditing “tangible” and “intangible” assets of a bank: 1. Assertions about existence or occurrence: Assertions about existence deal with whether assets, obligations, and equities included in the balance sheet existed on the balance sheet date. Assertions about occurrence concern whether recorded transactions included in the financial statements actually occurred during the accounting period. For example, management asserts that merchandise inventory included in the balance sheet exists and is available for sale at the balance sheet date. 2. Assertions about completeness: These audit assertions state that all transactions and accounts that should be presented in the financial statements are included. The completeness assertion deals with matters opposite from those of the existence or occurrence assertion. The completeness assertion is concern with the possibility of the omitting items from the financial statements that should have been included, whereas the existence or occurrence assertion is concerned with inclusion of amounts that should not have been included. Thus, violations of the existence assertion relate to account over-statements, whereas violations of the completeness assertion relate to account understatements. 3. Assertions about violation or allocation: These assertions deal with whether asset, liability, equity, revenue, and expense accounts have been included in the financial statements at appropriate amounts. For example, audit asserts that property is recorded at historical cost and that such cost is systematically allocated to appropriate accounting periods through depreciation. Similarly, audit asserts that trade accounts receivable included in the balance sheet are stated at net realizable value. 4. Assertions about rights and obligations: These audit assertions deal with whether assets are the rights of the entity and liabilities are the obligations of the entity at a given date. For example, audit asserts that assets are owned by the bank or that amounts capitalized for leases in the balance sheet represent the cost of the entity’s rights to leased property and that the corresponding lease liability represents an obligation of the entity. 5. Assertions about presentation and disclosure: These assertions deal with whether components of the financial statements are properly combined or separated, described, and disclosed. For example, audit asserts that obligations classified as long-term liabilities in the balance sheet will not mature within 1 year. Similarly, audit asserts that amounts presented as extraordinary items in the income statement are properly classified and described. For more clarification uses of audit assertion while auditing “tangible” and “intangible” assets of a bank can be expressed as following figure- Bibliography: Arens. A. A and Loebbecke. K. J (2000), Auditing- an integrated approach, 8th edition, Prentice Hall, New Jersey, ISBN: 0-13-086915-5. Carey, J. L., (1970), The Rise of the Accounting Profession: To Responsibility and Authority, 1937-1960 (1970), 3rd ed., New York, American Institute of Certified Public Accountants [1969-70] Carey, J. L., (1985), The Independence Concept Revisited, Ohio, CPA Journal: 5. 98 Carey, J. L., (1981), Professional Ethics of Public Accountant, Ayer Co Publishing, ISBN-10: 0405135068 Carey, P. & Simnett, R. (2001), Audit Partner Tenure: Implications for Audit Quality and Mandatory Rotation Policy, Working Paper, Monash University. Hayes, R., Dassen R. , et al, (2005) Principles of Auditing – an Introduction to International Standards on Auditing, 2nd Edition, Pearson Education Limited, Harlow. Loebbecke A. (2000), Auditing – An Intergraded Approach, Eight Edition, London, Prentice-Hall International (UK) limited Gupta, K., (2006), Fundamentals of Auditing, 6th ed., Tata McGraw Hill Book Co., New Delhi. Messier W. F. (2003), Auditing & Assurance Services, Third Edition, London: McGraw-Hill Irwin. Mintz S. M. (1997), Case in Accounting Ethics and Professionalism, Third Edition, New York: McGraw-Hill. Tandon, B. N. (2006), A Handbook of Practical Auditing, 5th ed, Sultan Chand & sons, New Delhi, ISBN #: 8121920418 Teoh, H. Y. & Lim, C. C. (1996), An Empirical Study of the Effects of Audit Committees, Journal of Accounting, Auditing and Taxation 5(2). Walter G. K. William C. B., Raymond N. J. (2006), Modern Auditing, Academic Internet Pub Inc., ISBN: 1428807640 Read More