The Accounting Profession and Nat

An important decision for any shareholder is deciding whether or not to do business with that company. When a business is audited, the operations are reviewed to make sure that nothing is being hidden. An auditor will review the company’s financial statement and practices to confirm that each are direct and correct. The financial statements are the business’s way of representing them and showing that they are following the Generally Accepted Accounting Principles. The audit process is an important one because it provides a platform for the auditor’s opinion concerning the financial statements of the company. As part of the audit process the auditor will conduct an audit plan that outlines a number of actions that he or she will be perform while also detailing the reason for those actions. With every audit, the business’s management is in charge of handing over the financial statements that the auditor will review; while the auditor will review the statements for any material or immaterial misstatements.

Financial investors rely on the accuracy of company’s financial statements so they depend on external auditors to insure that the financial statements are free of any material misstatements. 3. In the

Weygandt, J. J. (2009). Accounting principles. (10 ed., pp. 109-117). John Wiley & Sons, Inc.

Answer ALL questions The questions are NOT of equal value All answers are to be written in the examination booklet provided Candidates are to supply their own calculators All answers must be written in ink. Except where they are expressly required, pencils may be used only for drawing, sketching or graphical work. This paper may be retained by the candidate

Time Allowed: Reading Time: Total Number of Questions: Answer ALL questions. The questions are NOT of equal value. • Answers to Questions 1 to 6 must be written in ink on the lines or in spaces provided in this Booklet. • Question 7 must be answered on the separate Generalised Answer Sheet provided using a 2B pencil. This paper is NOT to be retained by the candidate. DO NOT OPEN THIS PAPER UNTIL INSTRUCTED BY THE EXAM SUPERVISOR 3 Hours 10 minutes 7

This frequently puts the auditor in the position, in effect, of deciding whether a company is able to obtain the funds it needs to continue operating. Thus, the auditor’s qualification tends to be a self-fulfilling prophecy. The auditor’s expression of uncertainty about the company’s ability to continue may contribute to making it a certainty.

The audit will become a strong tool for feeding a continual improvement method and providing recognition for excellence in any organization. Eminent implementation of AN audit method needs managers to line positive expectations concerning however audits are going to be conducted, choose vital areas for audits, give positive communication concerning the aim of the audit findings, and involve individuals in following informed the audit findings. The audit ought to be seen as a way for distinctive each opportunities for improvement and areas of excellence that merit reward and recognition.

In a perfect world, a company does not commit fraud or some other action to deprive its stakeholders standing, financially or otherwise. However, since the world is a smidge short of perfection, there are some checks and balances to protect stakeholders. Usually, a company’s accountants are such that the financial credibility is maintained internally and then confirmed by an auditor externally with the minimum of adjustments. If internal controls are ineffective, and a company is determined to undermine its stakeholders financially, those types of incidents are reined and culpable accounting practices are discovered by an auditor’s refusal to endorse the financials associated with said business. If the external process fails, the business’ potential viability fails. This has been proven over and over and quite famously.

In a free and open market, listed companies are required by law to provide their stakeholders with financial information that is credible. One method that can be used to obtain a trustworthy and objective financial reporting is through statutory auditing. However, the recent financial scandals and crisis have renewed concerns regarding the tenure of auditors and its impact on their audit quality and independence. Regulators and other experts have become concerned that the familiarity created between management and auditors over time and the need to retain client firms weakens the independence of auditors, and adversely affect the quality of their audit reports (Arel 2013: 16). On the other hand, those opposing mandatory audit firm rotation claim that the costs incurred as a result of frequently changing auditing firms surpasse its benefits by far (Beasley et al., 2009:67). Pozen (2012:11) points out that the chances of audit failures are greater during the early stages of an auditor-client relationship since the new auditor may not have auditor knowledge regarding operations, processes, and client-specific risks. The role of audit firm rotation as a means of sustaining the independence and reliability of financial reporting will be discussed in the paper as well as the views of stakeholders regarding the rotation rule and make recommendations on how to improve audit quality and independence will be considered.

This essay will discuss the ethical code that has major influence on audit failure and what scholars are saying towards auditor’s credibility and auditor’s code of ethics because when a company goes bankrupt the auditor’s independence is questioned and shaken (Moore et al 2006). It will also show what legislative body governing auditors are doing because users of financial statement are searching for auditors whose obligations covers: report of correct records, assurance that the financial statement is of true and fair view, company guards against errors and fraud, auditors are abiding by the rules and so on (Percy 2007).

The presence of an external auditor allows creditors, investors or bankers to use financial statements that have been prepared with confidence. Although it does not guarantee the accuracy of a financial statement, it provides users with some reassurance that a company’s financial statements give a true and fair view of its financial position and its business operations. It also provides credibility, where in business, is a major asset. With credibility, the willingness of investors, bankers and others to relate and undertake business projects with a company increases. Credibility is also important to build positive reputations.

An important function of the accounting field is to provide external users of financial statements with assurance that the financial information being presented is both reliable and accurate. This basic function of accounting is so important that there is an entire field of experts, called auditors, dedicated to assuring its proper performance. Throughout history there have been many instances in which the basic equilibrium between an institution and current/potential investor has been threatened due to a lack of accountability and trust between the two parties. This issue has been the catalyst for many discussions regarding the proper procedures a firm should follow in order to provide

The purpose of this paper is to highlight the role of external auditing in promoting good corporate governance. The role of auditors has been emphasized after the pass of the Sarbanes-Oxley Act as a response to the accounting scandal of Enron. Even though auditors are hired and paid by the company, their role is not to represent or act in favor of the company, but to watch and investigate the company’s financials to protect the public from any material misstatements that can affect their decisions. As part of this role, the auditors assess the level of the company’s adherence to its own code of ethics.

Council, Dr. D. B. Ayo, Dr. Ado. K. Abdullahi, Dr. L. E. Nsa, Mr. B. A. Adegbesan,

This article initiates with the introduction on what is audit planning. It basically addresses the audit plan strategy of K & S Corporation limited’s Financial Statements. Being an external auditor of the company, key factors to be considered in auditing the financials of the subject company have been discussed in the article. The most significant accounts at risk being materially misstated have been critically examined citing the possible risks associated with such accounts. Last but not the least, the article concludes with recommendations with respect to audit assessment plan of the company. Hence, this article seeks to act as a ready reckoner guide for an audit manager in audit planning of K & S Corporation Limited.