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.
An auditor supplies the independence and objectivity to a financial report complementing the high expectations of third party users The professional judgement required is influenced by some professional traits such as the auditor’s experience and capability of the auditors training. In additional to the professional traits influencing the auditor’s judgement, the auditors is also influenced by behavioural and ethical traits. Auditors have a responsibly to ensure that ethical standards are upheld, ensuring the social exceptions of auditors
These different gatherings have leaded the accountant to take after a few codes of ethics to play out their obligations in an expert workplace. Accountants must take after the code of ethics to set out by the expert assemblage of which they are a part. U.S. accounting societies for example, the Association of Government Accountants, Institute of Internal Auditors, and the National Association of Accountants all have codes of ethics, and numerous accountants are individuals from at least one of these
Forensic accountants will be experienced at giving evidence in court and preparing reports for court. It is important to establish a relationship with the forensic accountant. An ongoing relationship enables you to ask questions about a matter and get a feeling for the issues and reduces the time required to brief the accountant. The instructions that we receive are often one page, briefly detailing the important facts of the case, contact details for the client and enclosing copies of financial documentation available. Due to our ongoing relationship with the solicitor, we arrange a conference with the client, obtain further financial details and in turn provide our expert
What are the responsibilities of internal auditors? (1) Possess the skills necessary to perform change management audits (2) Understand the technical and business environment, as well as factors that influence the change control effectiveness (3) Learn how to assess change management
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.
1.1 Background of the study Over the years the role of the internal auditor in companies has continued to gain importance. This is because the internal auditor adds value to the organization, which could be quantified in monetary terms through their evaluation of controls. Harsh economic conditions coupled with complex market conditions, fraud and financial scandals, failed corporate governance policies have made it difficult for organizations to achieve their key objectives (Mikes & Kaplan, 2013). This has necessitated an effective internal audit role in order to carefully analyze the business risks identified and recommend timely corrective actions. The internal auditor occupies a unique position in the organization.
The American Accounting Association (AAA) defines “Accounting as the process of identifying, measuring and communicating economic information to permit informed judgement and decision by users of the information”. Accounting is perceived as a source of communication and language. Accounting statements provide information about the financial performance and position of an entity that is useful to a wide range of users for assessing the stewardship of the management and for making economic decisions. Users can be internal and external. In order to better understand the importance of accounting, it should be considered from a social view.
Traditionally, accountants have been responsible for key aspects of the information system, including assessing the information needs of users, defining the content and format of output reports, specifying sources of data, selecting the appropriate accounting rules, and determining the controls necessary to preserve the integrity and efficiency of the information system. Accountants as System Auditors Accountants audit the already ‘acclaimed’ AIS to ensure that what is claimed to have been implemented is actually followed. Note that the role of auditors is not to fetch thieves in a system, but to ensure that rules claimed to be followed are backed up by documentation and where it is not possible for it to be documented, the auditors should observe the process take place. Auditing is a form of independent attestation performed by an expert - the auditor - who expresses an opinion about the fairness of a company’s financial statements. Public confidence in the reliability of internally produced financial statements rests directly on their being validated by an independent expert auditor.
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.