It is also essential to evaluate whether the asserted liabilities are obligation to an entity or not. Date plays a crucial role in the audit report as for occurrence of any major changes between the date of…
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Fixing up the date of the audit report is the other important aspect. The date should not be earlier than the probable last date of collecting all the audit evidences to support the auditor’s opinion or the last day of the field work. AU 530 has mentioned the appropriate date while delivering additional copies of the previous report as demanded by CPA. 2
Here subsequent events refer to the events that have occurred between the balance sheet date and that of the audit report. The process to identify the events that may require changes or disclosures in the financial statement can be presented accordingly.
To ensure that the subsequent events have been recognized, the auditor needs to review all the processes that have been established by the management. Careful checking of the minutes of the meeting is also required. The meeting that has been held after the balance sheet date among the shareholders, board of directors and auditors is regarded here. Diminutive observation of the interim financial statement is also required. The other way of determining the subsequent events is to make inquiry of the lawyers who are concerned with litigation and claim. Even management can also be inquired to find out the events occurred after the balance sheet date. The auditor needs to be conscious regarding certain factors; namely development of any risk factor or contingencies, unusual accounting adjustments and the status of the items those are accounted on the basis of the inconclusive data. 3
Even the departments or the components of an entity that have been audited by any another auditor, should also be audited by the principal auditor. The auditor needs to observe the events those have materiality influences on the financial statements to check whether it has been accounted properly in the financial statement. 4
The responsibility of the auditor is to evaluate the appropriateness of the process of using going
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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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