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Auditing - Research Paper Example
Finance & Accounting
Pages 8 (2008 words)
Research Paper Auditing Name of Institution AUDITING Major scandals that have by the accounting profession in recent times have usually been a result of a fraud. Therefore in order to maintain confidence in the profession it is the major role of an auditor to prevent and detection of the fraud…
International GAAP, ISA 240 the Auditor Responsibilities Relating to Fraud in an Audit of Financial Statements recognizes that the misstatement in the financial statement can arise from the either fraud and error. The distinguishing factor is whether the underlying action that resulted in the misstatement was intentional or unintentional. The above all situations are supposed to be a fraud because the audit team found all these activities as a fraud. In relation with IAS 240, the fraud is a criminal activity. In addition, it is not a role of the auditor to determine whether the fraud is has actually occurred. That is the responsibility of a country’s legal system. Auditor must only be aware of the impact of fraud on the accuracy of financial statements. The GAPP rules state that the auditor is responsible for obtaining reasonable assurance that the financial statements, taken as a whole, are free from material misstatements, whether fraud and error. ...
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