...Auditing has been basically seen as a ‘social phenomenon' since its purposes remain continuously being change, dependent on the scale of interconnection among the audit profession and the public (Flint, 1988; Power, 1997; Sikka et al., 1998). From one viewpoint, the audit profession seeks to certify that auditing is viewed as important to the changing needs of the public through the progression of the audit function. Flint (1988), Power (1994; 2000), Epstein and Geiger (1994) and Petland (2000), for instance, maintain that, this development was in effect to a professed need of the society who look for information or assurance about the behavior of others. Researchers such as Fogarty et al. (1991), Sikka (1992; 2002), Humphrey et al. (1993),...
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...objective like this can only be met if the people using the audit report are convinced that the auditor might have been influenced by parties like the directors in the company or other interests that are bringing conflicts like when the auditor happens to own shares in the same company that is being audited and has issues with the company (Nicoll, 2005). Conclusion Finally, contracting services that are against fraud and provide security to companies is a very important and wise investment for any company to take since it ensures that a company implements ethical business behavior. This is also very important in a company since it ensures that the performance of the company is improved on a daily basis. Understanding the importance of the independence of the auditor is also very...
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...The Effect and Importance of the Audit and the Performance of Auditing in Sudan This study by : Babiker Othamn Omer Saad This paper conducted to study in an in-depth research of the importance of the auditing performance , the subject matter of this research mainly focused on not having available quantitative measuring tools which evaluate the risk , therefore, we find that in most of the time there is threatening risk , based on that the auditing practice will not lead to trace the intrinsic forgery cases even when the agreed measurement of auditing is applied. The main aim of this study is to shade light on the types of risks in auditing performance and to build understanding of the importance of the relevant relation between tis and practice , the researcher uses the assumptions e.g the relation between auditing practice and the risk of auditing mainly depends on the evaluating and reporting of the auditor, planning of the audit process implies a comprehensive strategy of evaluating and implementing the auditing operation, this paper also proved that there is a relation between the quantitative audit reporting and enough clues of prove . This research proved that we cannot neglect the audit process and this considered as an entrance to better of the organization which will facilitate professional performance of the audit process. Based on the outcome of this study the researcher came out with the following recommendations: * The organizational firms should develop the...
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...Sampaloc Manila Job Opportunities for Internal Auditing Graduates A Research Paper Presented to the Institute of Accounts, Business & Finance Proponents: Ballan, Mary Jane M. Bautista, Dennis V. Burce, Jayraldine D. Culaton, Mary Joy C. Dacillo, Jessmin P. (Leader) Maquinano, Jem Karol R. Ortiz, Maribel G. Quiros, Marco M. Reyes, Angela M. Palencia, Alfred Foster M. Pascual, Karl Alexis M. Villanueva, Christian Paul M. In Partial Fulfillment Of the Requirement for the Degree of Bachelor of Science in Business Administration Major in Internal Auditing Dr. FE R. OCHOTORENA, CPA Adviser First Semester Academic Year 2014-2015 Job Opportunities for Internal Auditing Graduates AIA0807/Group 3 Abstract Internal auditing helps the organization to achieve its future goals by improving the business process of the organizations. The purpose of this study is to determine the job opportunities of Internal Auditing graduates. This study used the descriptive method of research and used non-probability sampling technique specifically stratified random sampling. This study revealed that job opportunities for the Internal Auditing graduates are rising in foreign companies particularly for the positions of Junior Internal Auditors given that Internal Auditing is designed to add value by helping organizations achieve its objectives. We conclude that many companies are already appreciating the importance of internal auditing function in their organizations resulting to increase...
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...Generally Accepted Auditing Standards Auditing is a vital role within for-profit organizations, non-profit organizations, government, and the economy. With many standards, rules, procedures, and regulations placed on auditing financial reports for organizations, one would obtain an understanding as to the Generally Accepted Auditing Standards (GAAS). These GAAS were collaborated by members of the American Institue of Certified Public Accounting (AICPA) in the 1940's. In the 1940's, three guidelines to include General Standards, Standards of field work, and Standards of reporting. Each of these topics includes details as to the "flow" of the auditing process. After the Sarbanes-Oxley Act of 2002, (SOX), the regulations were increased with detail, and offered more insight as to the consequences of not following the "rules". The Public Company Accounting Oversight Board, (PCAOB), obtained more duties to assist in reviewing material relevant to auditing and auditors. One of the points one may find interesting is the importance of the regulations lack of required documentation. Rather than placing detailed requirements on included reports it lays a framework of guidelines of which to include, and what material needs to be disclosed. The main purpose for the regulations is to promote full disclosure and transparency, a common element which was missing prior. Commonly, many find the regulations to apply to for-profit and publicly traded organizations, however; many are inclusive...
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...The independence of internal auditing in China Term Paper Advanced Auditing February, 15 * The independence of internal auditing in China Abstract China’s rapid economic growth boosted its accounting system that has evolved at a singular rate. The national government encourages foreign investors to participate in the domestic capital market actively. The government also strictly supervises the different national economic activities; as a result, the credibility of the auditing system plays a important role. Chinese government as well as some firms seek reliable and independent internal audit services. This paper will examine some factors which may cause lack of independence in Chinese internal audit systems, the difference between the internal auditing in China and in western countries. Based on interviews and questionnaires, suggestions are made for future improvement on the internal audit system in China. Key words: internal auditing, audit independence I INTRODUCTION The globalization of economy, complexity of business and allegations of fraudulent financial reporting have recently sharpened the ever-increasing attention to internal controls and internal auditing. (Karagiorgos et al., 2009) The role of internal auditing is also evolving as reflected in the following definition ‘an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing...
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...Generally Accepted Accounting Standards Paper Prithvi Shenoy ACC491 October 14, 2013 Michael Milkonian Abstract The importance of Auditing has gained considerable attention ever since its introduction in the mid-1800s. According to FASB, Statement of Financial Accounting Concepts No. 2, relevance and reliability are central to making accounting information useful for decision makers. To achieve this, auditors are required to obtain “reasonable assurance that those financial statement are presented fairly in all material respects” (Boynton & Johnson, 2006). This paper aims to explain the nature and types of auditing which is governed by the Generally Accepted Auditing Standards (GAAS). The paper then discusses the effects of Sarbanes-Oxley (SOX) Act 2002 and the Public Company Accounting Oversight Board (PCAOB) on publicly traded companies (issuers). Finally, the changes in the auditing environment with respect to the additional responsibilities placed on auditors and PCAOB as a result of the enforcement of SOX Act 2002 is discussed in the paper. Generally Accepted Accounting Standards Paper The elements of GAAS In response to the McKesson & Robbins’ accounting scandal in 1938, the AICPA introduced the 10 Generally Accepted Auditing Standards (GAAS) in 1939 to provide “guidance on the conduct of an audit” as well as an “overview of the timing of the different phases of an audit engagement” (Louwers and Ramsay et al., 2007). The 10 basic standards can be...
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...Management: Bedrijfsdomeinen Accounting and auditing Financial misstatements and/or errors are likely to occur in the accounting reports of many firms for a variety of reasons that might involve the complexity of financial information as well as an intent to deceive (e.g. by tampering with the earnings figure of a firm), or even to hide criminal activities such as money laundering. This is why auditing the financial results of a firm, although not always required by law, often proves useful to investors and shareholders (for example to assess the state of the company), the fiscal authorities (for example to detect fraud), etc. Auditing is performed within a given framework of rules and transparency in order to avoid possible conflicts of interests, bribes or frauds, yet accounting scandals and questionable auditing practice regularly make the news. The purpose of this paper...
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...AUDITING A RISK-BASED APPROACH TO CONDUCTING A QUALITY AUDIT 9th Edition Karla M. Johnstone | Audrey A. Gramling | Larry E. Rittenberg CHAPTER 5 PROFESSIONAL AUDITING STANDARDS AND THE AUDIT OPINION FORMULATION PROCESS Copyright © 2014 South-Western/Cengage Learning LEARNING OBJECTIVES 1. 2. 3. 4. Identify and compare the various auditing standards that provide guidance on the audit opinion formulation process List and discuss the foundational principles underlying the auditing standards List the phases and related activities in the audit opinion formulation process Explain the concept of accounting cycles and discuss their importance to the audit opinion formulation process Copyright © 2014 South-Western/Cengage Learning 5-2 LEARNING OBJECTIVES 5. 6. 7. 8. Describe the assertions that are inherent to financial statements and explain their importance to the audit opinion formulation process Define audit evidence and describe the purpose and types of audit procedures used to obtain audit evidence Discuss the importance of audit documentation and provide examples Discuss audit activities in Phase I of the audit opinion formulation process Copyright © 2014 South-Western/Cengage Learning 5-3 LEARNING OBJECTIVES 9. 10. 11. 12. Discuss audit activities in Phase II of the audit opinion formulation process Discuss audit activities in Phase III of the audit opinion formulation process Discuss audit...
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...Chin Hong) Faculty of Economics and Business University of Malaysia Sarawak Presented By Muhammad Usman Research Proposal for PHD Admission: Presented By Muhammad Usman Page 1 TABLE OF CONTENTS 1.0 2.0 INTRODUCTION BACKGROUND 2.1 2.2 2.3 2.4 3.0 4.0 A brief history of internal auditing The role of the internal auditor Role of the risk management function The internal auditor and the risk management process PROBLEM STATEMENT RESEARCH OBJECTIVES 4.1 Specific Research Questions 5.0 6.0 7.0 8.0 9.0 IMPORTANCE OF STUDY SCOPE OF STUDY RESEARCH DESIGN THE LITERATURE REVIEW DATA COLLECTION & SAMPLING 9.1 9.2 Survey by questionnaire and interviews Sample selection 10.0 11.0 DATA ANALYSIS REFERENCES Research Proposal for PHD Admission: Presented By Muhammad Usman Page 2 1.0 INTRODUCTION The audit function has been performed at least since the fifteenth century. However internal auditing has developed most rapidly throughout the twentieth century as a core tool of risk assessment. Today, in businesses worldwide, the internal audit function is becoming very important for achieving the objectives of organizations. In recent years, UAE market has recognized the importance of the internal audit function, which is why that function has been established in some public as well as private companies. These companies setup audit functions to deal with the assessment of control, good governance and risk management. Managing risk is actually managing the organization...
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...problem or question. Evaluate the importance of the research question to audit practice. This paper attempts to stimulate research into some of the important questions implicitly raised by SOX regarding the audit profession’s potential failings. Enron’s failure and the accounting scandals at Worldcom and other companies provide compelling evidence that auditing matters and is important. However, it is unclear that whether auditing was sufficiently “broken” in the first place to warrant the radical reforms and changes effected by the SOX. The disconnection is large between the scientific evidence on audit quality and institutional changes premised on the assumption that auditing is broken. This research gives us the direction which we need to collect scientific evidence to guide public policy-making in audit. B. Explain the author’s approach to solving the problem. The authors discuss the following areas and give some suggestions for future research in each of them: 1. Why auditing matters now more than ever 2. Institutions that affect auditing 3. Engagement-specific characteristics that affect audit quality 4. The role of auditing and corporate governance 5. Audit quality and other accounting firm characteristics C. Describe the major findings of the research. 1. The criticism embodied in SOX is usually intense, and appears to be partially motivated by political expediency and often based on anecdotes. 2. SOX transforms auditing from a self-regulated industry that...
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...Audit and Assurance Services Chapter 1 1 Learning Objectives 1. What is auditing? Distinguish between auditing and accounting. Importance of auditing in reducing information risk. 2. Distinguish audit services from other assurance and non-assurance services provided by CPAs. 3. Three main types of audits. 4. How to become a CPA? Identify the primary types of auditors. 2 What is auditing? Evaluating 3 Nature of Auditing Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria. Auditing should be done by a competent, independent person. 4 Audit Reporting -- (Expressing Opinions) The final stage in the auditing process is preparing the Audit Report, which is the communication of the auditor’s findings to users. 5 Information and Established Criteria To do an audit, there must be information in a verifiable form and some standards (criteria) by which the auditor can evaluate the information. 6 Accumulating Evidence and Evaluating Evidence Evidence is any information used by the auditor to determine whether the information being audited is stated in accordance with the established criteria. Transaction data Client inquiry Written and electronic Communications with outsiders Observations 7 Competent, Independent Person The auditor must be qualified...
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...designing projects as measuring the outcomes of the projects in line with the target goal of the organisations (Elliot, Barry & Elliot, Jamie, 2004). Organisations maintain their financial reports with the help of accounting theories and policies. The international financial reporting standards also help to keep the accounting practice effectively, efficiently, and correctly. The efficient management will be built if the organisation follows the international reporting standards accurately. As a mandatory course unit of myself I need to prove my understanding about the financial systems and auditing through this report. I will gradually demonstrate my understanding on the purpose, use, importance of accounting records, accounting systems, computerised accounting system, manual accounting systems, business risk, audit risk, internal and external control systems, importance of auditing, and planning audit assignment as well as preparing audit report in the body part of my report. Task One Purpose and Use of Different Accounting Records Accounting records represents the management of all source of information in different records books. These records are ledger, journals, bank statements, adjusting journals, statement verification, invoice, brochure, and etc. The purpose and use of different accounting record in the following. Purpose To illustrate the purpose of accounting records we chose main two types of accounting record. These are journal and ledger. The journal represents...
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...to Generally Accepted Auditing Standards (GAAS), which would lead one to believe that all audits are of the same quality. This however is not the case. In this paper I will discuss the issues that most greatly affect audit quality such as the size of the audit firm, independence of the auditor, and the monetary considerations given. These factors also affect management’s decisions to select a particular audit firm. Audit quality is most heavily influenced by the size of the audit firm and the perceived reputation of that firm. The larger a firm, the more stress that is put on performing a quality audit due to reputation losses in the event of audit failures is likely to be greater for large audit firms (DeAngelo). Large audit firm must limit audit failure to reduce litigation issues that negatively affect the reputation of their firm. A firm’s size also affects the dependence that the firm has on each of their customers. The smaller a firm is, the more they rely on a single customer for revenue and continued business. This decreases the likelihood that a material misstatement will be disclosed in the auditing report. Whereas a bigger audit firm has a larger client portfolio and a smaller dependence on that client for continued business. In these cases, you would observe a positive correlation between office size and audit quality. Audit Firm size is also deemed to affect the level of product and service quality associated with an audit. The importance of providing uniform...
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...Information System Auditing Assignment Name ACC/542 Date Sanders Moran Information System Auditing Assignment The article selected for this assignment is titled “Implementing the IT-Related Aspects of Risk-Based Auditing Standards”. It is an overview of the importance of performing a Risk-based audit and the necessary steps auditors take in implementing risk assessment within their audit. Two sets of standards drove the need for risk assessment for IT controls. The first; AICPA SAS 104-111 (Risk Assessment Standards Toolkit) which covers the risk assessment standards and the key points auditors need to consider when incorporating them in an audit. Second, PCAOB AS 5; Audit of Internal Control over Financial Reporting that is Integrated with an Audit of inherent risk. My paper will cover the following topics outlined in the article: benefits of risk-based auditing, planning a risk assessment procedure, gaining an understanding of the IT environment, risk assessment, determining whether further audit procedures (FAP) are necessary, designing and performing FAP, and evaluating Audit Findings. Recommended approach and Benefits of Risk-Based Auditing The layout of the article closely resembles the top-down approach that is required by AS 5. This approach is basically how the auditor performs their auditing procedures; not necessarily the order in which they do them. Top-down “begins at the financial statement level and with the auditor’s understanding of the overall risks...
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