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AUDITORS’ RESPONSIBILITIES AND REPORTS - Coggle Diagram
AUDITORS’ RESPONSIBILITIES AND REPORTS
Fundamentals underlying financial statements audits
Relationship between accounting and auditing
Independent Auditor relationship
Verifiability,professional,judgement and fair presentation
Auditing Standards
Generally accepted auditing standards
PCAOB Auditing Standards
Assurance Provided by an Audit
Auditor Independence
Reasonable Assurance
Detecting and reporting fraud
The auditors report on financial statement and internal control
The standard report of financial statement
The standard report on internal control
Issues in governance
Risk Management and internal control
Financial misstatements-earnings managements
Internal auditing
Internal auditing has been regarded as the key audit role in enhancing governance processes in organisations
Operational auditing
Operational auditing has been used in the past to evaluate a variety of activities that include management’s performance, management’s planning and quality control systems, and specific operating activities and departments.
Objective of an audit commitee
– financial reports and other financial and non-financial information
– the appropriateness of accounting policies used
– adequacy of financial management policies and procedures
– adequacy and monitoring of internal control structures
– proper risk management plans and processes
Requirements for audit firms and audit Committees
Auditors must report to the audit committee not management.Lead audit partner and audit review partner must be rotated every fife years
– financial reports and other financial and non-financial information.adequacy of financial management policies and procedures.proper risk management plans and processes
Audit Firms
The Big Four Firms
This firm resulted patially from several major merger in the late 1980s and this firm made up of deloitte , Ernst & Young , KPMG and PricewaterhouseCoopers.
The Non Big Four firms
These firms can hardly be treaded as a homogeneous Group.At one extreme there are a very large number of small local firms with only a handful of professionals