Auditor Responsibility And Its Effects On All Material...

In general, auditor responsibility is to express opinion on whether the financial statements are free of material misstatements and presented truth and fairness in all material respect. Auditor will first understand of the entity and its environment, and continue with the planning and perform risk assessment procedure, and also all necessary audit procedure to obtain sufficient appropriate evidence before concludes the audit opinion. ISA 315 Identifying and assessing the risk of material misstatement through understanding the entity and its environment stated that ‘Obtaining an understanding of the entity and its environment, including the entity’s internal control (referred to hereafter as an ‘understanding of the entity’), is a continuous, dynamic process of gathering, updating and analysing information throughout the audit. The understanding establishes a frame of reference within which the auditor plans the audit and exercises professional judgment throughout the audit.’[1] PCAOB Standard AU319 stated that: â€Å"A sufficient understanding of internal control is to be obtained to plan the audit and to determine the nature, timing and extent of tests to be performed.† [2] A clear understanding of client’s internal control assists auditor to determine which areas are potential of material misstatements and the related audit procedures to be taken. Auditor has to evaluate management assertions, understand the design and flow of internal control, and perform test of control toShow MoreRelatedSummary of Sarbanes-Oxley Act of 20021383 Words   |  6 PagesThe Sarbanes-Oxley Act (SOX) was passed by Congress in 2002 (www.sarbanesoxley. com). The Act, along with subsequent regulations adopted in 2003 and 2004, affected the responsibilities of auditors, boards of directors, and corporate managers with respect to financial reporting. Also, the act established the Public Companies Accounting Oversight Board (PCAOB) that is now responsible for oversight of financial statement audits of publicly-traded corporations and the establishment of auditing Read MoreThe North Face, Inc Case Essays665 Words   |  3 PagesInc 1 Auditors should not insist that their clients accept all proposed audit adjustments even those that have an â€Å"immaterial† effect on the given set of financial statements. Because â€Å"immaterial† effect on the financial statements will not affect the users’ decisions. Therefore, auditors have to confirm if the effects on the financial statements are really â€Å"immaterial†. If there are really â€Å"immaterial†, sometimes the auditor would be forced by the clients to ignore it. So the auditor should giveRead MoreThe Sarbanes Oxley Act ( Act ) Essay1660 Words   |  7 PagesOxley. It mandates strict reforms to improve financial disclosures from corporations and prevent accounting fraud. The Sarbanes Oxley Act is arranged into eleven titles. They are Public Company Accounting Oversight Board (PCAOB), Auditor Independence, Corporate Responsibility, Enhanced Financial Disclosures, Analyst Conflicts of Interest, Commission Resources and Authority, White Collar Crime Penalty Enhancement, Corporate Tax Returns, and Corporate Fraud Accountability. These titles provide the descriptionRead MoreQuestions And Research Question Questions1160 Words   |  5 PagesResearch Question 15-48 Who Signs Who Receives Required/Optional When Sent Purpose a) Client s Lawyers Auditor Required By the completion of the audit Obtain corroborative verification relating to contingent liabilities b) CEO CFO Auditor Required By the completion of the audit Remind management regarding reporting responsibilities and get written responses to prior inquiries c) Auditor Client Optional After audit Provide management with productive suggestions on way to develop their organizationRead MoreHomework Assignment Week 11195 Words   |  5 Pagesincludes a requirement that (3) Due professional care be exercised by the auditor D. What is the general character of the  three generally accepted auditing standards classified as standards of field work? (3) The criteria of audit planning and evidence gathering. 2-17 (Objective 2-7)  The following questions concern quality control standards. Choose the best response. A. A CPA firm is reasonably assured of meeting its responsibility to provide services that conform with professional standards by (2)Read MoreSample of Engagement Letter1528 Words   |  7 Pages17/2008 on â€Å"Appointment of Auditors and Audit Engagement Letter† or its update.] Sample Audit Engagement Letter (for REFERENCE ONLY) Our Ref. : Date : The Incorporated Management Committee of (name of IMC School) (â€Å"School†) Dear Sirs, |AUDIT ENGAGEMENT LETTER | The purpose of this letter is to set out the basis on which we are to act as auditors of the IMC and the respective areas of responsibility of the Incorporated ManagementRead MoreEssay on Example Auditing Case753 Words   |  4 Pagesto â€Å"clarify the responsibilities of management and the auditors† (Pany, Professional Standards, 2010). B. In the opinion paragraph it states, â€Å"except for the matters discussed in the first and the final paragraphs of this report† (Pany, Auditors Report, 2010). In the auditor report they do not refer back to the exception of the report. The opinion paragraph is to consist of only one sentence which is a restatement from previous paragraphs and includes the opinion of the auditors. C. In the opinionRead MoreApollo Shoes Audit Report1042 Words   |  5 PagesManagements Responsibilities for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements, in accordance with the generally accepted accounting principles in the United States of America. Management is also responsible for maintaining effective internal control over financial reporting relevant to the preparation and fair presentation of financial statements that are free form material misstatements. Auditor’s Responsibility Our responsibilityRead MoreStandards Based Decision Making1589 Words   |  7 Pagesfinancial controls. With all of the issues that Green and Associates are encountering the four types of auditor’s opinions, if their inventory valuation methods are legal and supported by GAAP, and if ABC’s refusal to permit an internal controls audit is within federal law need to be investigated. Lastly, an opinion must be written to address the situation and detail the ethical problems involved for both ABC and Green and Associates. The four types of opinions auditors use to quantify a statementRead MoreEssay on Acc 564 Assignment 11054 Words   |  5 Pagesconfident in the companies within the market. In order to restore confidence within the market and the audits of their financial statements Senator Sarbanes and Representative Oxley created the legislation known as the Sarbanes Oxley Act which came into effect in 2002. The legislation created major regulations on company financial reporting and the regulation of it. Forcing management to be accountable for the financial reporting and internal controls within their company and requiring the audit committees