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thanks for the invitation but sorry i have no expertise in auditing area.
- References are considered the responsibility of the discovery of errors and fraud of the controversial things in the business community. Several studies have been conducted about that concluded that the auditors they should:
1. discover all fraud cases important.
2. carry out the review process in a manner leading to the discovery of all cases of fraud and error.
3. assume greater responsibilities to discover the error and fraud. Because the community expects them to discover all error and fraud cases during the audit.
- As well as multiple studies have professional organizations, led by the American Society of Certified Public Accountants issued a set of professional flyers about the responsibility of the references for error and fraud was discovered. These releases are:
ü audit procedures No. 1 Bulletin:
It issued in the late thirties of the twentieth century. She explained that the auditor plan review process in order to express an opinion on the fairness of financial reporting, not to detect errors and fraud in it. And that error and fraud discovery process is not considered a primary goal of the review. However, this publication did not succeed in convincing the beneficiaries of financial reports so.
ü audit procedures Bulletin No. 30 in 1960:
This bulletin has included the following:
1. References should be cautious and aware of the possibility of error and fraud in financial reporting.
2. If the references discovered during the audit process and the existence of other things raises doubts about the existence of an error or fraud lead to a material misstatement in the financial statements, he should contact one of the representatives of the entity under review to determine who was responsible for that error, fraud and identify Mekdaarhama accurately.
3. References depends when determining the nature of the basic tests, timing and extent of the internal control system. Thus, the administration is responsible for the design of an effective system of internal control.
4. carry this bulletin references liability accounts error and fraud and did not discover the expansion of its responsibility in relation to that.
This bulletin does not succeed in achieving the goal of the issued and to increasing cases of litigation against auditors for failing to detect fraud and error and ignore the courts limited the responsibilities of auditors according to this bulletin.
ü Auditing Standards Bulletin No. 16 of 1977:
This publication focused on the following:
1. distinguish between deliberate distortion and unintentional in the financial reports.
2. stressed the need to develop a plan for review by the auditor take into account the important search for the error and irregularities.
3. References responsibility identified for error and irregularities up to the sample, which is reviewed by the discovery.
4. References can not rely on the system of internal controls to prevent fraud. Because this system can be bypassed by management.
This bulletin has not received general acceptance for users of financial reports because they expected expansion in the responsibility of the references in error and fraud discovery and not just search for them. The expressions used in this newsletter was vague and did not provide enough guidance for the auditors. And therefore did not meet the needs of the accounting profession or business community.
ü revision No. 53 of 1988 Standards Bulletin:
This bulletin has adopted a positive entrance instead of a defensive character, who was in previous releases. Where a group points explained the auditor taken into account, namely:
1. Planning the audit can be references to provide confirmation of a reasonable degree of detecting errors.
2. exercise an appropriate degree of professional skepticism to detect errors and irregularities.
3. evaluate the risks the possibility of errors or irregularities may lead to the preparation of misleading financial reports.
4. evaluate the possibility of misleading financial reports and distorted by management. By studying the following matters:
a. Failure to follow generally accepted accounting principles.
B. Not to answer all inquiries references.
C. Failure of management in the policies necessary to provide reasonable emphasis on the safety of accounting estimates and procedures.
5. into account when assessing audit risk associated with assurances regarding account balances following factors:
a. The extent of the vulnerability of assets for embezzlement.
B. The efficiency of persons engaged in the operation of moving the data in the account balances and processed.
C. The impact of personal judgment in determining account balances.
Dr.. The impact hazards assist in the evaluation of the review on the level of financial reporting account balances risk factors.
e. The amount of components of the account balances, size and vocabulary elements.
This bulletin does not succeed in achieving the goal of the issued and because it did not give a clear explanation of the meaning is certainly reasonable and appropriate degree of skepticism, and also did not provide guidance on the relative importance of the factors that should References
To take into account when assessing the risk of distortions. Proof of this is the increasing incidence of litigation against auditors and the continuation of the expectations gap regarding the responsibility for the error and fraud was discovered.
has no responsibility but it could be a sign of a weakness auditing.not all misstatement can be discovered weather it is by fraud or by mistake. so, an auditor declare in his financial report of how far could go over a company's financial documents.
I am not knowing about it, but if he found any mis statement, he can report it to higher authority for the further action.
Thanks for the invitation.
It depends on the situation .He should determine the professional and legal responsibilities applicable in the circumstances, including whether there is a requirement for the auditor to report to the person or persons who made the audit appointment or, in some cases, to regulatory authorities
Also consider whether it is appropriate to withdraw from the engagement, where withdrawal is possible under applicable law or regulation; and If he withdraws he should discuss with the appropriate level of management and those charged with governance the auditor’s withdrawal from the engagement and the reasons for the withdrawal
The auditor’s professional duty to maintain the confidentiality of client information may preclude reporting fraud to a party outside the client entity. However, the auditor’s legal responsibilities vary by country & in certain circumstances; the duty of confidentiality may be overridden by statute.
Hello Team,
Auditors will enter a much expanded arena of procedures to detect fraud as they implement SAS no. 99. The new standard aims to have the auditor’s consideration of fraud seamlessly blended into the audit process and continually updated until the audit’s completion. SAS no. 99 describes a process in which the auditor (1) gathers information needed to identify risks of material misstatement due to fraud, (2) assesses these risks after taking into account an evaluation of the entity’s programs and controls and (3) responds to the results. Under SAS no. 99, you will gather and consider much more information to assess fraud risks than you have in the past.
There are two primary objectives of the brainstorming session. The first is strategic in nature, so the engagement team will have a good understanding of information that seasoned team members have about their experiences with the client and how a fraud might be perpetrated and concealed.
The second objective of the session is to set the proper “tone at the top” for conducting the engagement. The requirement that brainstorming be conducted with an attitude that “includes a questioning mind” is an attempt to model the proper degree of professional skepticism and “set” the culture for the engagement. The belief is that such an audit engagement culture will infuse the entire engagement, making all audit procedures that much more effective.
The mere fact the engagement team has a serious discussion about the entity’s susceptibility to fraud also serves to remind auditors that the possibility does exist in every engagement—in spite of any history or preconceived biases about management’s honesty and integrity.
Regards,
Saiyid
Thanks Mr Gorge for your great answer
I apologize for the answer I leave the answer to the specialists experts in this the field that's not my area.
Full Agree with Mr. Georgei on his answer
