Introduction Auditing is a systematic process of objectively obtaining and evaluating evidence to ascertain the degree of correspondence between the assertions and communicating the results to interested users. Whereas, auditors are the person who conducts the auditing procedures to obtain reasonable assurance that the financial statement are free from material misstatement, whether cause by the fraud or error. Although ISA 240 recognized that the auditor may fail to detect material misstatement caused by fraud as the financial statement is well concealed and embedded, but it still does not exclude auditor from detecting fraud (Hasaan, 2013). Besides, it also mentions that it is the responsibilities of auditor to consider fraud in auditing
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
CHAPTER ONE 1.1 Background of the study Audit expectation gap can be defined as the distinction between the actual and expected responsiblity of an auditor. According to the American Institute of Certified Public Accountants (AICPA) in 1992, the expectation gap could be defined as "the differentiation between what the public and users of financial statements believe auditors are responsible for and what auditors themselves believe their responsibilities are. In 1974, Liggio describe the expectation gap as the difference between the real and the expected performance he was the first person to explain what it meant. This explanation was emphasized by the Cohen Commission on auditors’ responsibilities in 1978, where the expectation gap is characterized
The auditor's opinion enhances the credibility of financial statements by providing a high, but not absolute, level of assurance. The purpose of public sector auditing is to determine any embezzlement from the estimation being planned, to declare any wrongdoings in relation to the principles, orders, rules and regulation and to declare the elements and factors which fail to lead for effectiveness, efficiency and economical utilisation of the government’s
The IT Audit function in the Board must contribute towards: Bringing innovation method into positioning with company strategy. Ensuring that technology decisions remain in the very best interests of shareholders. Cultivating organizational development and alignment between business systems. Increasing the Board's overall understanding of technological issues and repercussions within the company. This type of understanding can not come from monetary analysis alone.
Auditing professionals are sometimes required to review a previous judgement passed, regarding a client that they have audited. This possesses an ethical dilemma because if the auditor discovers errors in the work performed previously it may lead to them having a different opinion regarding the audit, this would highlight the lack of professional integrity and competence that the auditor has and that will reflect badly on the auditor. This leads to the auditor being biased against their own review which will result in the auditor making a prejudice decision in an attempt to protect
An investment in knowledge pays the best interest. Several Salient attempts to undertake significant roles in addressing challenges in corporate reporting ended up in a development in certain areas of financial accounting, if not all. The idea of financial accounting as a whole has the responsibility to identify the parties in business transactions and provide them with the information they need to do business in a fair and objective manner. In the same vain, the content of such information should be useful to present and potential investors and creditors, not excluding other external users in making rational decisions. The accounting practice requires that financial statements must be honestly prepared, continuously observed and all significant
Audit is examination and evaluation of the financial statements of an organization. It can be done internally (by employees of the organization) or externally (by an outside firm). For many enterprises, the annual statutory audit is required by law. Recently, however, the trend in European Union has been towards an exemption from the audit requirement for smaller companies. Audit is an important way to increase confidence in the information and thereby enhance confidence and stability in the economy.
It consists of Customer billing statements, Sales orders, purchase Requisitions, Sales analysis reports, Register checking, Vendor invoices, general ideas, payroll information, timekeeping and inventory data, tax information. This data can be used to preparing the accounting statement and reports. (Fontinelle, 2017).Accounting Information System is used for to produce the external stories related to the financial statement, supported through routine activities, Decision Support and Planning and Control, Implementing internal control. Accounting Information roles are classified into External Auditor, Tax Accountant, Consultant and Internal Auditor, Business Analyst, Budget analysts, Financial Analyst, controller and Accounting Clerk. It is discussing the future, and current role of Accounting Information system is analyzing by accountant responsibility and financial
Those standards require that appropriate professional skepticism be applied in the exercise of professional judgment. The auditor’s professional scepticism throughout the audit is particularly important when considering the risks of material misstatement due to fraud. ASA 240 states that the Auditor’s Responsibilities Relating to Fraud in an audit of a Financial Report places special emphasis on professional scepticism and requires the auditor to investigate further where conditions identified during the audit cause the auditor to believe that a document may not be authentic or may have been modified. Due professional care requires the auditor to exercise professional scepticism, because of the characteristics of fraud, the auditor 's exercise of professional skepticism is important when considering the risk