The Responsibility of the External Auditor and the Management of the Entity Being Audited with Relation Fraud and Error.

1585 Words Feb 23rd, 2012 7 Pages
CRAM Exclusive
Essay Sample: Page 2
That’s why it is always required that auditors should maintain an objective, unbiased and independent mind, and give special attention to this area. The auditor should understand the entity’s internal control in its totality.

Fraud and other irregularities are different to errors as perpetrator intended deception and it could be a person that knows the operations and accounting systems of the company very much, and also the management may override internal controls and makes an effort to conceal the misstatements. It is important to note that whenever there is an accounting scandal or fraud has been committed. The question that always arise is “Where were the auditors?” when this unfortunate events occurs. According to . According to Arens,Elder, Beasly & Splettstoesser-Hogeterp (2007:288) auditors should maintain a questioning mind and set aside any previous trust in management’s integrity and honesty. Maintaining a questioning mind involves a critical evaluation of audit evidence presented to the auditors, they should diligently probe any audit issues and acquiring if necessary any additional evidence needed in the audit.

Assignment number :01

Course code: HONOUDK

Student number: 36894206

2.2 The responsibility of management

The South African Institute of
CRAM Exclusive

Related Documents

  • The Changing Role of External Auditor Essay examples

    system where it is starting being govern by the law can be traced in Companies Act 196 and Accountants Acts 1967. In Companies Act 1965, it requires companies to have the accounting records to be audited and in true and fair view. Independence of the auditors also being underline in the Act, where any relationship between the independent auditor and the companies must be disclose, to prevent any conflict in interest when auditing the accounting records. The external auditors were given the power to obtain

    Words: 1479 - Pages: 6
  • Role of the External Auditor in Corporate Governance Essay examples

    the External Auditor in Corporate Governance The external auditor has long played an important role in the corporate governance function. However, before we begin our analysis on how the external auditor plays this role and its importance, we must first examine the responsibilities and duties of such an auditor. Similarly, we need to clearly define what corporate governance is before we discuss in detail the role that auditors play in it. 1. Introduction 1.1 The External Auditor External auditors

    Words: 2642 - Pages: 11
  • Business Entities Ethical Socially Responsibility Essay

    ways show their social responsibility through community support, such as outreach and donations. When a company does something that is perceived to be socially irresponsible it can be bad for business, such as in the case of Company Q declining to give day old food to the area food bank. This paper will evaluate Company Q’s attitude toward societal responsibility and recommend three areas of improvement. Company Q, in my opinion, showed a lack commitment to social responsibility by not supporting the

    Words: 1333 - Pages: 6
  • Internal & External Institution of Corporate Governance Essay

    The Internal and External Institutions of Corporate Governance: Regulators, Markets, Auditors and Others As reported by: Gallardo, Ralph Lauren Granada, Mon Cedric April 20, 2013 A Reaction Paper by: Lacsamana, Rodrigo II Submitted to: Carolina Guerrero, CPA The External Institutions of Corporate Governance: Regulators, Markets, Auditors and Other Institutions “The Price of Greatness is Responsibility” -Winston Churchill Corporate governance may refer to

    Words: 1741 - Pages: 7
  • Operational Risk Management Essay

    ≈√ F M A G u i d e l i n e s on Operational Risk Management These guidelines were prepared by the Oesterreichische Nationalbank in cooperation with the Financial Market Authority Published by: Oesterreichische Nationalbank (OeNB) Otto-Wagner-Platz 3, 1090 Vienna, Austria Austrian Financial Market Authority (FMA) Praterstraße 23, 1020 Vienna, Austria Produced by: Oesterreichische Nationalbank Editor in chief: Günther Thonabauer, Communications Division (OeNB) Barbara Nösslinger

    Words: 50810 - Pages: 204
  • Co-Operation Between Internal and External Auditors: a Comparative Study on Nationalized and Foreign Banks in Bangladesh

    World Journal of Management Volume 2. Number 2. September 2010. Pp. 22 - 35 Co-operation between Internal and External Auditors: A Comparative Study on Nationalized and Foreign Banks in Bangladesh Rehana Fowzia Effective co-operation between internal and external audit leads to a range of benefits for both parties, and the clients they serve. This study comparatively examines the influence of different factors on co-operation between internal and external auditors of foreign banks with nationalized

    Words: 6191 - Pages: 25
  • Starbucks Red Flags of Fraud Essay

    University Online: ACCT 320-1203A-01 Professor White 6 August 2012 Abstract This paper will provide an overview of Starbucks Coffee Company and identify seven red flags of possible fraudulent behavior within the organization. Steps to design a fraud prevention program will also be discussed based on the identified red flags. Starbucks Coffee Company opened its first store in Seattle, Washington in 1971 offering fresh-roasted whole bean coffees. “Howard Schultz (Starbucks chairman

    Words: 2332 - Pages: 10
  • Auditor Independence Essay

    for the period and accountable to shareholders. Auditors have a responsibility to plan and perform the audit to obtain reasonable assurance to the shareholders and other stakeholders of a company on the financial statements. The objective of an audit of financial statements is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial

    Words: 1968 - Pages: 8
  • Essay on Preventing Fraud - A check signer's responsibility

    your professional standing as a CPA, you are required to comply with the American Institute of Certified Public Accountant (AICPA) Code of Ethics. The AICPA’s Code of Ethics outlines what the profession considers a CPA’s ethical and professional responsibility to clients. Ethical dilemmas come in many forms and do not always have a prescriptive or clear-cut response. For example, someone could be pressuring you into misrepresenting facts, compile reports that are misleading or a material misstatement

    Words: 1621 - Pages: 7
  • Fraud Case Essay

    | | |Financial Statement Fraud | |Navistar International Corporation | |

    Words: 3360 - Pages: 14