Got a tricky question? Receive an answer from students like you! Try us!

Report in auditing - Essay Example

Only on StudentShare
Author : wisozkike

Summary

3. Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmations to afford a reasonable basis for an opinion regarding the financial statements under audit.
4. The report shall contain either an expression of opinion regarding the financial statements, taken as a whole, or an assertion to the effect that an opinion cannot be expressed…

Extract of sample
Report in auditing


The fact that the external auditors will not be able to physically inspect or examine the audit procedures does not comply with the GAAS (Standards of Field Work, No. 3). This standard explicitly requires the auditor's ability to examine, inspect, observe and confirm the accounting information obtained during the audit procedures.
Standard No. 3 of GAAS General Standards requires "mental independence" on the part of the auditor, which might not be fulfilled because the acquiring auditing firm's principal partner is a cousin to TPC's CEO. In this situation, the auditor might not be able to give a free and independent opinion and rather be under significant pressure throughout the process.
The last situation is entirely in violation of GAAS Standards of Reporting No. 1. This standard requires that the company's financial statements should be in full compliance with the Generally Accepted Accounting Principles (GAAP). However, according to the aforesaid situation, TPC's accounting records have not been prepared in accordance with the GAAP standards.
In order to bring the audit in compliance with the GAAS standards, the first action that should be taken is to provide the auditor complete mental freedom to undertake the audit process and independently obtain the infor ...
Download paper

Related Essays

Data Mining for Auditing
However, with increased use of databases, comes a new challenge: how to make sense of the abundant data Auditors are overwhelmed with massive collection of data. Omnipresent personal computers, low cost multi-gigabyte disks, ubiquitous electronics and new generation database languages have made it very simple for companies to capture data and save it without any worries of loss of space, time or computing power. This benefit of databases to companies is also the bane to auditors. However, the effective utilisation of one robust technology will bring sense to the chaos generated by databases:…
8 pages (2008 words)
Operational Auditing
An operational audit is a review of any part of an organization's operating procedures and methods for the purpose of evaluating efficiency and effectiveness. At the completion of an operational audit, management normally expects recommendations for improving operations. An example of an operational audit is evaluating the efficiency and accuracy of processing payroll transactions in a newly installed computer system. Another example, where most accountants would feel less qualified, is evaluating the efficiency, accuracy, and customer satisfaction in processing the distribution of letters and…
20 pages (5020 words)
Auditing
It means that the internal control process helps to ensure that the company's financial reporting i.e. the preparation of annual and interim financial statements along with the earning reports is done with utmost responsibility and integrity. Because the published financial statements go a long way in influencing the decisions of various stakeholders, it is the most crucial responsibility of internal control system to provide assurance with respect to the reliability of financial information. The third objective is to ensure that all the legal requirements as well as laws and regulations…
3 pages (753 words)
Auditing Essay
The employee had been steeling for years and covering her tracks by dividing the amount into very small amounts in the various accounts.…
10 pages (2510 words)
Advanced auditing
Rob Gray tries to identify the scope of social accounting as "the preparation and publication of an account about an organisation's social,environmental,employee,community, customer and other stakeholders' interactions and activities and where possible the consequences of those interactions and activities" With the increase in the business activities backed by globalization, business enterprises have started locating their production facilities across the world, breaking cross border barriers. Such a rapid development, many a times will result in the firms overlooking their social obligations…
10 pages (2510 words)
Auditing
An auditor who works for a mid size firm takes on the assignment of auditing Telechubbies for the first time based on information that is provided to the auditor by Rachel Jones, the financial controller of Telechubbies.…
2 pages (502 words)
auditing
The Cheaphol plc is a tour operator, who had been performing its business excellently until a fire at a foreign hotel killed their ten guests on 28th May, 2010. The Winters & Co audited the firm during May 2010 and auditor’s unqualified report was signed on 5th June 2010. The submitted report was clean audit report which did not contain any references to the financial difficulties.…
8 pages (2008 words)