This risk may arise when an auditor reviews his or her own work performed during a previous audit. For example, an auditor may audit a department repeatedly or in continuous years. Hence, the auditor may provide consulting services in relation with a system execution that they subsequently must audit. Moreover, the auditor may also put up recommendations for functional transformation and subsequently review operation that are changed with those recommendations accordingly. 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.
For example, Mark, Hal, Brenda and Gail know about a substantial number of old stock and past due records. By eliminating this data which was found during the audit, would lead them to be part of the group to this unlawful action and dishonor the auditing profession. Brenda and Hal wish to deny these outcomes from Mark’s report to keep their rewards and the significant image of the association. Mark must pick whether to forbid results and abuse the Institute of Internal Auditing's Code of Ethics or conflict with his organization and report his findings. 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.
Professional scepticism is an important part of auditing as it necessitates the auditor exercising their qualified judgement in dealing with occurrences and circumstances of a countless number. (Auditing and Assurance Standard Board, 2012). Since the global financial crisis, there has been increasing importance placed on applying professional scepticism and many auditors have been criticised for not using scepticism in their valuation and assessments of factors like going concern issues, fair value judgements and related party transactions. (Association of Chartered Certified Accountants, 2015). Additionally, the importance of professional scepticism is essential in reducing the number errors found in financial statements.
Managers and auditors ensure that goals are achievable and useful to the company. Managers assess the corrective actions needed based on the findings of the audit team. They offer support and oversight to ensure the resolution of issues in a timely manner. The audit team cannot dictate decisions. It can only make recommendations based on its assessments of the change management
Problem Statement: “Is it always cost effective to detect / prevent collusion between auditors and management?" The aims of my research project: • To find out the ways that how collusion between management and external auditors can be detected. • To find out the potential advantages for the organization if collusion between management and external auditors forms. • To find out the cost savings for the organization when ignoring the collusion between management and external auditors. A brief review of previous research: The phenomenon of detecting or preventing collusion between auditors and management leads to the study of internal controls in the organization or corporate governance.
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.
Contents Maintain the quality of Auditing 2 Role of microcomputers in Audit Process 4 References 8 Maintain the quality of Auditing a. Discuss how the auditor ensures that the quality of the audit is maintained in the face of constantly changing computer technology. (10 marks) There are many ways that the auditor can implement in ensuring the quality of the audit is maintained despite constantly changing computer technology in the audit system. First, the auditor needs to have training on the new system before the system is officially implemented in the company. Training plays an important role because the auditor will have clear understanding about the new system and they can improve the adaption towards the new system.By giving training,
Central issues on size of firms, auditor’s reputation and audit fees There are many issues to maintain audit quality sustainability. The most important issue is size of the company. Therefore, clients are more likely to have high quality company to get the best auditing opinion. So, they are more interested to choose large audit firm that have high reputation and have high quality rather that small audit firm. Besides that, we can say that, the higher reputation, the more accurate audit report because low accurate audit report can lead to lower reputation of the company.
This GR8 Prospects Ltd charter sets out the setting, purpose, authority, responsibility, status and authority of Internal Auditing within the company, and it outline the scope of the internal audit work. The primary objective of internal audit activity is to provide independent, objective assurance and consulting services designed to add value and improve the organisation’s operations; it also helps the organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of control, governance process and risk management (Pickett and Picket, 2003). This GR8 Prospects Ltd charter establishes authority and responsibility conferred by management of the internal audit activity. This GR8