Auditor 's Audit Adjustment : Audit Adjustments

831 Words Sep 15th, 2015 4 Pages
Question # 1
No.
Clients are not inclined to adopting auditor’s advised audit adjustments, which forces auditors to somehow determine on an aggregate basis the impact that proposed and/or passed audit adjustments have on a client’s financial statements. The most common reason for a client not to make a proposed audit adjustment is that the client disagrees with the need for the given adjustment. We don’t want to see that audit engagements at the end of the day become a war between client management and auditors over proposed audit adjustments.

Question # 2
Yes. To the greatest extent possible, auditors should not provide clients with access to the critical parameters or facets of audit engagements, including materiality limits. According to this case, the CFO used the materiality to interfere with the integrity of the entire audit engagement.
It is often not feasible to conceal information such as materiality limits from client personnel.
Sometimes, auditors always have client pull documents, prepare various schedules to which audit procedures will be applied, and perform other important audit-related tasks. In completing these tasks, client personnel can often determine the auditor’s intent and the scope limit of a given audit test. Likewise, clients have access to the professional auditing sources and professional publications that discuss the general guidelines that auditors use in making important strategic decisions during the course of an audit, including the…
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