Irregularities, materiality and indication of irregularities, Auditing

Irregularities:

Irregularities can be explained as intentional distortions of financial statements for whatever reason and also as misappropriation of possessions whether or not a company by deformation of financial statements. The auditor's duty to fraud and other irregularities is precisely similar as that of errors.

Materiality:

When the auditor knows or suspects that a fault or irregularity has happened or exists, then he cannot apply materiality thought until he has adequate proof of the extent of the fault or irregularity.

Indication of irregularities:

Possible signs of irregularities involve:

  • Misplaced documents or vouchers, these could have been intentionally damaged to hide an irregularity;
  • Proof of altered documents: modifications can occur after the transaction has been accepted;
  • Unsatisfactory description: these are descriptions which are vague and are unproven;
  • Proof of disputes;
  • Existence of anxiety accounts or mysterious differences on reconciliations;
  • Proof that internal control is not operating as it is planned to;
  • Overly lavish life styles of officers and employees;
  • Figures not agreeing with prospects.

 

Posted Date: 12/3/2012 5:44:00 AM | Location : United States







Related Discussions:- Irregularities, materiality and indication of irregularities, Assignment Help, Ask Question on Irregularities, materiality and indication of irregularities, Get Answer, Expert's Help, Irregularities, materiality and indication of irregularities Discussions

Write discussion on Irregularities, materiality and indication of irregularities
Your posts are moderated
Related Questions
The modern approach allows one audit of an auditable entity with one comprehensive report. One additional advantage is that this approach assists in staff development and retention

Prepayments - Audit Process Prepayments similar to accruals are not mostly checked through the double entry system. This creates them susceptible to mistake. The auditor's pro

Please assist me with these assignments The auditors for Weston University are conducting their audit for the fiscal year ended December 31, 2011. Specifically, the audit firm is n

Auditors use various tools to document their understanding of an entity's internal control system, including narrative descriptions, internal control questionnaires, and flowcharts

project report on absorption of overhead and its different method

Valuation and Allocation - Audit Process As we saw assets are usually valued at cost or a valuation less a provision for usage or loss of value.  We have to ensure therefore t

Necessity of Transactions with Related Parties Transactions along with related parties are essential for several reasons: (a) Several financial scandals including related p

In previous times, the Kings used to hear their accountants narrate the accounts verbally. Though, as the complexity of the accounting function grew, require was felt to thoroughly


IAS 27 - Audit Process IAS 27 applies to the presentation and preparation of consolidated financial statements for a group of entities within the control of a parent. It as w