All of these examples represent conditions in which the auditor could become less vital or lack due to the difficulty of maintaining objectivity when reviewing their work. Last area of risk is intimidation risk. Intimidation risks arise when an auditor is acting objectively by risks or being overtly by audit clients and other interested parties. For example, auditors being threatened with dismissal or replacement in relation to a client engagement. They can also being threatened with litigation.
2 The objectivity principle rule of conduct 2.1 violated that is “internal auditor shall not participate in any activity or relationship that may impair or be presumed to impair their unbiased assessment. This participation includes those activities or relationships that may be in conflict with the interests of the organization” (Kurt, pp.2-7, 2-8). For example, it is disregarded by Gail Wu because of her incapacity to remain impartial from her past position in the finance department. It demonstrates the irreconcilable circumstance of the
Introduction This report is about comparative analysis of the given question ‘Do an accountant need to be ethical?’ This comparative analysis report includes comparison and contrast among the relatable sources used, explained accordingly and the list of references. Simply ethics is a code of fundamental principles so accounting professionals can demonstrate honesty and fairness to maintain the public trust and profession. This comparative analysis report compares and contrasts on how code of conduct or ethics are used, relation with accountants in different cases and sources to support the argument. Source 1: Code of Ethics Na.theiia.org.(2017). Pages- Code of Ethics.
The purpose of an audit is to enhance the credibility of financial statements by providing written reasonable assurance from independent sources that the financial statements present a true and fair view in accordance with the accounting standards. This objective will not be met if users of the audit report believe that the auditor may have been influenced by other parties, more specifically the enterprise managers/directors or by conflicting interests (A.O.Oladipupo, F.I.O. Izedonmi, 2013) There are three main ways in which the auditor‘s independence can manifest itself: Programming independence, investigative independence and reporting
The first step that the auditor should take is to gather as much information about any security procedures and policies that may have been in use following the information collected from the records available. Since each policy may have a different aspect that it works on, the findings from the audit may present evidence that may be vital in identifying the existing procedures or the absence of any policies or procedures. The existence of policies and procedures enables a company to reduce the occurrence or the impacts of a given risk. The lack of such policies may lead to reduced risk management
The public sector auditors are responsible for the mandate or obligations for public sector entities lawfully. A broader scope of audit is implemented in public sector that in private sector. INTOSAI or relevant setters deal with auditor reporting requirements. The auditor’s report is lengthier and more explanatory, reports more widely on aspects of performance than the standard auditor’s report. Consultation Paper needs to solve the issues of public sector encouraged by IAASB.IAASB will further solve special issues of public sector with INTOSAI and relevant setters if necessary.
The internal audit function will be free of any undue influences which could restrict, over-rule or otherwise affect the judgment as to the content of a report or in any way require the department to function under duress or which could affect the department or conduct of an investigation. There will be no restrictions on the scope of the internal audit activity’s work. To reviewing the systems established by management to ensure compliance with those policies, procedures, laws and regulations which will have a significant impact on operations, and determining whether the board is in compliance; to safeguard assets and as an appropriate way to verifying the existence of those assets. This will include operations or programmes to ascertain whether results are consistent with established primary objectives and goals; or whether the programme are being carried out as
Results will be in the form of descriptive report, facts, tables and figures that will cover the cost savings for the stakeholders and the company because of ignoring the collusion between auditors and management. We will analyze the potential advantages when the collusion is ignored and try to access real cases of the organizations when they ignored the collusion. This topic also relates to the management fraud, where fraud can be any activity that might be intentional in a way that would result in the loss of one party over the gain of the other party, and in the case of management and auditors’ collusion, that means that there would be loss of the stakeholders and loss to the reputation of the company in the market. Research Limitation: Collecting the primary data might not be possible because of the access problems to the companies. Companies might not be interested in revealing the information on the topic and might feel reluctant to fill the questionnaires.
1. Auditing can be defined as carrying out a formal financial investigation or examination of a firm and its financial statements. During the process of auditing the auditors will go through all of the company’s books and financial statements. He will analyze research and go through all the relevant financial records to ensure that they are accurate and whether taxes are being paid properly. 2.
2. Reliability: With moral principles clients are able to rely more on the Accountants. The nature of the work carried out by accountants and auditors requires a high level of ethics. Shareholders, potential shareholders, and other users of the financial statements rely heavily on the yearly financial statements of a company as they can use this information to make an informed decision about investment. They rely on the opinion of the accountants who prepared the statements, as well as the auditors that verified it, to present a true and fair view of the company.