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

1585 Words Mar 8th, 2012 7 Pages
CRAM Exclusive
Essay Sample
Assignment number :01 Course code: HONOUDK Student number: 36894206 The responsibility of the external auditor and the management of the entity being audited with relation fraud and error. 1.Introduction Fraud is defined as something that is intended to deceive people and error is defined as something unintentionally done wrong, e.g. as a result of poor judgment or lack of care by Encarta English Dictionary. After the collapse of great companies like Enron, and World com to mention a few

middle of document…

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
Pet67742Pet

Related Documents

  • The Changing Role of External Auditor Essay examples

    Then, Section 174(8) also highlighted that auditor is protected by law where before this, any unfavorable report from the auditor might break the relationship between the external auditors and the companies. Although MIA make a huge effort in the regulatory field during the post NEP era, in addition with the implementation of auditors’ ROC reporting duties, yet there are the response was still below under expectation. It was said that emphasizes in transparency of the conduct did not fit the day

    Words: 1479 - Pages: 6
  • Business Entities Ethical Socially Responsibility Essay

    have started offering a very limited amount of health-conscience and organic products—all of which were high margin items. When asked by the area’s food bank for donation of day-old products, management declined deciding instead to throw the food away, citing worries over lost revenues due to possible fraud and stealing by employees who might say they are donating the food. it would be most appropriate for the businesses to consider ethical practices in their operations so as to enhance maintenance

    Words: 1333 - Pages: 6
  • Role of the External Auditor in Corporate Governance Essay examples

    the recommendation for change in the independence rules? 2. Cause for Change in Auditor Independence Rules In the recent years, there have been many high profile corporate failures that had a very large impact on the accounting profession. One such example is the Enron debacle which led to the demise of the accounting firm, Arthur Anderson, then part of the Big 5. This has caused the relationship between auditors and their clients to be heavily scrutinised. Over the years, in a bid to diversify

    Words: 2642 - Pages: 11
  • Essay on Internal and External Factors of Management

    viewed as an internal and external factor within the planning function at Microsoft. Internally, management at Microsoft consistently ensures it will “align business and technology goals” (Microsoft, 2008). In order to continue to be prosperous, Microsoft must plan functions efficiently among departments to develop cohesively and market a product. This form of planning ensures the company operates as a whole entity. An external factor that impacts the planning phase of management within technology is

    Words: 1389 - Pages: 6
  • Essay Internal & External Factors of Management

    many different functions of management. In order for managers to delegate the organizations plans they need to understand the internal and external factors that contribute to globalization of the organization. Managers within McDonald’s need to examine the economic conditions and technology factors that contribute to how their organization will be more successful. A manager might delegate different departments within the organization to research new markets so the management team has a better understanding

    Words: 821 - Pages: 4
  • Essay on Preventing Fraud - A check signer's responsibility

    the University of North Texas at Dallas (UNTD), and upon successfully passing of the Certified Public Accountants (CPAs) exam. After months of searching you finally secure gainful employment as a CPA at a local family-owned hotel. The day-to-day management decisions and operations of the business were mainly decided by Jack and Jill, who are brother and sister. Two weeks into the 90-day probationary period, you discover the company has been facing financial difficulties, which includes the possibility

    Words: 1621 - Pages: 7
  • Customer Relation Management Essay

    In term of Customer Relationship Management, Singapore Airlines has become a role model in airline’s service industry. Customer is always the highest priority for them and they constantly focusing on customer needs has helped to retain existing customer and to attract new customer. Singapore Airlines has getting awards for customer’s service consistently. Loyalty programs are playing the most important part in Customer Relationship Management and it’s a marketing efforts to retain consumer by rewarding

    Words: 1402 - Pages: 6
  • Co-Operation Between Internal and External Auditors: a Comparative Study on Nationalized and Foreign Banks in Bangladesh

    The internal auditor is assigned by the management of the bank. They are assigned to find out whether everything is going properly or not. If any problem exists they have to bring it to the notice of the top management and then the concerned authorities take necessary action. But in case of external audit the auditors come from outside and they are assigned by the shareholders. They audit on behalf of the shareholders and the findings they publish on the annual report also give independent opinion

    Words: 6191 - Pages: 25
  • Internal and External Factors and Management Functions Essay

    to Hormel Food’s SWOT Analysis (2013), the company’s external opportunities include growing food service industry, increasing popularity of natural and organic foods and growing microwaveable foods market. Hormel’s external threats include stringent regulations, rising labor wages in the U.S. and an increase in vegetarianism in the U.S. (p. 2). These internal and external factors provide a basis of analysis for Hormel that empowers management to make strategic decisions to make improvements where

    Words: 1227 - Pages: 5
  • Accounting Fraud at Worldcom 2 Essay

    WorldCom found that the second largest fraud in history at that time continued as long as it did because no one in the financial or accounting department had the courage to blow the whistle. There are pros and cons of “whistle blowing” that should be taken into consideration when one is making the determination to expose fraud at any level. For a person to be a whistle blower they must have integrity and a desire to minimize the wrongs in a culture where management cuts corners to improve the bottom

    Words: 1418 - Pages: 6