There are various types of auditors who have a variety of skills to conduct audits that are different in nature. Each of the different types of auditors share one characteristic in common, which is independence, as any audit conducted without a degree of independence from the entity being audited will make the results and assurance provided by the auditor ‘worthless’. What are the 5 types of auditors and their functions? Provide relevant examples to support your answer

There are various types of auditors who have a variety of skills to conduct audits that are different in nature. Each of the different types of auditors share one characteristic in common, which is independence, as any audit conducted without a degree of independence from the entity being audited will make the results and assurance provided by the auditor ‘worthless’. What are the 5 types of auditors and their functions? Provide relevant examples to support your answer

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter5: Professional Auditing Standards And The Audit Opinion Formulation Process

Section: Chapter Questions

Problem 7CYBK

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Generally accepted auditing standards require auditors to be independent.Included within this standard are the concepts of independence in fact and independence in appearance.Required:a. Define independence in fact and independence in appearance.b. What two general types of relationships would normally compromise auditors’ independence?c. For each of the following separate situations, discuss whether you believe the auditors’ independence has been compromised.1. The auditors’ firm provides extensive consulting services to the client; these services provide revenues to the firm that exceed revenues received from the audit engagement.2. The spouse of the partner in charge of the audit engagement occupies an executive-level position within the client.3. A distant relative of a partner within the firm occupies an entry-level position within a client of the firm. (The audit is conducted by another office of the firm with which the partner has infrequent contact.)4. A staff member within the…
Auditors are important because they are able to provide assurance of an organization's financial statements from an objective and independent opinion. It benefits the company in several ways, such as maintaining consistency, finding errors in their processing, or detecting fraud. While performing work , the auditors may face situations when they will not be able to fulfill ethical requirements. Answer the following three questions based on the above case By having the auditor review his or her own work, the auditor cannot be expected to form an unbiased opinion on the financial statements. Which threat may occur when a previous judgment needs to be re-evaluated by the professional accountant responsible for that judgment? a. Self-review threats b. Advocacy threats c. Intimidation threats d. Self-interest threats
Which of the following statements relating to internal and external audits is false?* The execution of solutions to issues brought to light by internal auditors are the responsibility of management of the organization. Independence is a fundamental ethical principle for internal auditors. For financial auditing, the audit report typically goes to many users of financial statements, whereas operational audit reports are intended primarily for management. The objectives of internal auditors are considerably broader than the objectives of external auditors.
Which of the following BEST (select one) describes why auditors must maintain independence? a) The value of the audit report is higher if the report is free of bias. b) The value of the audit report is lower if the report is free of bias. c) The value of the audit report is generally not impacted by the independence of the auditor. d) The value of the audit report depends on the due professional care of the auditor performing the work.
is always a good idea for auditors to begin an audit with the professional skepticism characterized by the assumption that Select one: a. Financial statements and financial data are verifiable b. In audits of financial statements, the auditor acts exclusively in the capacity of an auditor c. The professional status of the independent auditor imposes commensurate professional obligations d. A potential conflict of interest always exists between the auditor and the management of the enterprise under audit
Auditors are important because they are able to provide assurance of an organization's financial statements from an objective and independent opinion. It benefits the company in several ways, such as maintaining consistency, finding errors in their processing, or detecting fraud. While performing work , the auditors may face situations when they will not be able to fulfill ethical requirements. Answer the following three questions based on the above case 32. Which threat may occur when a professional accountant may be deterred from acting objectively by threats, actual or perceived? a. Self-review threats b. Advocacy threats c. Intimidation threats d. Self-interest threats
Auditors are important because they are able to provide assurance of an organization's financial statements from an objective and independent opinion. It benefits the company in several ways, such as maintaining consistency, finding errors in their processing, or detecting fraud. While performing work , the auditors may face situations when they will not be able to fulfill ethical requirements. Answer the following three questions based on the above case Which threat may occur when a professional accountant may be deterred from acting objectively by threats, actual or perceived? Intimidation threats Advocacy threats Self-review threats Self-interest threats
Which among the following is the most important limitation of an audit, which result in most of the audit evidence while the auditor draws conclusions? a. Management and others do not provide complete information intentionally/ unintentionally b. Auditor’s opinion is mostly persuasive rather than conclusive. c. Audit is not an official investigation into alleged wrongdoings d. The occurrence of non-compliance with laws and regulations
The company being audited has an internal auditor who is both competent and objective.The independent auditor wants to assign tasks for the internal auditor to perform. Under these circumstances, the independent auditor maya. Allow the internal auditor to perform certain tests of internal controls. b. Allow the internal auditor to audit a major subsidiary of the company. c. Not assign any task to the internal auditor because of the internal auditor’s lack of independence. d. Allow the internal auditor to perform analytical procedures but not be involved with any tests of details.
Auditors are important because they are able to provide assurance of an organization's financial statements from an objective and independent opinion. It benefits the company in several ways, such as maintaining consistency, finding errors in their processing, or detecting fraud. While performing work , the auditors may face situations when they will not be able to fulfill ethical requirements. Answer the following three questions based on the above case 34. Which threat may occur when, because of a close relationship, a professional accountant becomes too sympathetic to the interests of others? a. Advocacy threats b. Self-review threats c. Self-interest threats d. Familiarity threats
Auditors are important because they are able to provide assurance of an organization's financial statements from an objective and independent opinion. It benefits the company in several ways, such as maintaining consistency, finding errors in their processing, or detecting fraud. While performing work , the auditors may face situations when they will not be able to fulfill ethical requirements. Answer the following three questions based on the above case Which threat may occur when, because of a close relationship, a professional accountant becomes too sympathetic to the interests of others? Self-review threats Self-interest threats Advocacy threats Familiarity threats
Registered auditors have skills and knowledge to perform their functions and they should becompletely honest in performing their functions. The following actions taken by registered auditorsare examples of non-compliance with one or more of the fundamental principles.Required: Identify with explanations which of the fundamental principles belonging to the SAICACode of Professional Conduct have not been complied with in each of the situations describedbelow:a) Randy Rice the registered auditor in charge of the Perry Sauce (Pty) Ltd audit, made racistcomments concerning the clients staff during an audit planning session.b) Jerry Jan the registered auditor in charge of the audit of Dribble Drabble (Pty) Ltd, chargedthe client a fee for audit procedures which he knew had not actually been carried out.c) Tolly Ted a registered auditor, arranged with some of his clients to pay the fees which hecharged for his services in cash. Any client agreeing to do so was not charged VAT and wasgiven a…