Why Would The Owners Of Lakeside

The auditor must remember that all information collected during the audit needs to be sufficient enough to further the audit process. The information must not only possess the two qualities, relevance and reliability, but it should also test various assertions. For instance, in the audit of Walmart, the auditor should make an attempt to acquire information such as financial statements from the company’s bank, as opposed to acquiring the statements from Walmart’s management. Taking such crucial information from Walmart’s management will put the reliability of that information into question. It is possible that management may manipulate the financial statements, so that they are more appealing to the public and investors. Management may do things

The auditor needs to state explicitly whether the financial statements are fairly presented in accordance with the applicable financial reporting framework, and this may be GAAP or IFRS.

17) The risk that the auditor will NOT detect a material misstatement that exists in an assertion is

Legitimacy in accounting practices is ensured by the check and balance of having independent auditors from registered public accountant firms reviewing financial practices. The report features eleven sections and these sections pertain to accounting overview, independence of auditors to reduce interest conflicts, corporate responsibility, financial disclosures, tax returns, criminal fraud and various elements of white collar criminal activity (107th Congress

1) Internal Auditors are expected to add value to the organization through improved operational effectiveness. In addition, their responsibilities include all the following except:

The Lakeside Company: Auditing Cases, 12th edition, has been updated in light of the accounting

The auditor must obtain an understanding of the entity and its environment, including internal controls, so that they can identify and assess the risks of material misstatement on financial statements due to fraud or error and design and perform further audit procedures.

The purpose of an audit is to enhance of confidence in the financial statements. An auditors opinion validates this purpose.

Rittenburg, Larry. Johnstone, Karla. Gramling, Audrey. (2012) Auditing: A Business Risk Approach 8e. Mason: South-Western, Cengage Learning.

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 (Pearson, 2014). The external auditors auditing client’s accounting records are qualified accountants who express true and fair vies as to whether the financial statements are present in accordance with the relevant accounting standards such as International financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP). We auditors are accountable for the financial statements to be free from material misstatement, fraud or error. As auditors of Petrol One Resources Berhad, an Oil & Gas industry service

The main, but rather restricted, function of the internal audit at this stage was verifying the reliability of the financial information included in the financial statements. The internal audit function in this stage of evolution could not understandably add much value to functioning of the entity.

The need for an external audit in the case of companies arises primarily from the

Since reliable financial information is essential for investors and other stakeholders to take adequate decisions, this reliability must be backed by independent review performed by independent and certified auditing firms, which are supposed to verify and certify financial statements issued by a company’s management. If the auditor is not competent and independent from management, the audit of the financial statements loses its credibility (Schelker, 2013, p.295). According to Impastato (2003), because of audit failures, accountants are to blame for investors losing billions of dollars in earnings in addition to market capitalization (as cited in Grubbs & Ethridge 2007).

The aim of this essay is to study the function of external auditors in order to analyze why it is important to be independent. The primary mission of external auditors is to review and evaluate all the financial records of a company or corporation. They provide an objective opinion on the organization’s financial statement and effectiveness of the accounting polices in order to help management to make decisions. If the independence of the external auditors is impaired, the public will doubt the quality of professional auditing services, and the consequence would be very serious, just like the bankruptcy of Enron led to the disorganization of Arthur Andersen, once a giant accounting company in the world. In order to maintain and increase

These days, people all over the world are facing difficulties in believing external audit services because of current drawbacks such as failure in corporation, current financial crisis as well as banking crisis. On the other hand, the professions in every country is trying their best to remove the doubts of the customers in every way to maintain their self - regulatory status. Likewise, the professions in UK also are endeavoring with might and main to reform to improve their audit and audit quality to make people reinforce their confidence in the financial markets and to win the public interest and the public acceptance.