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
You are auditing XYZ company for the year ended 12/31/2012 and will be expressing an opinion on their financial statements as of that date. You completed your field work on 1/21/13

Information in the Fixed Assets Register The register can obtain the following information: i. Fixed asset number. ii. The cost and the date of purchase. iii. Descrip

Ask quesThe following situations involve a possible violation of the MIA ByLaws (on professional ethics, conduct and practice). For each situation, (1) decide whether or not the Co

Advantages and disadvantages

Going Concern Considerations - Audit Process IAS 1 Presentation of Financial Statements knows the going related assumption as one of the fundamental assumptions that underlie

Fairness -  Auditing The word fair can have the following meanings:  on the other hand clear, plain and distinct and on the one impartial, equitable and simple.  When fair is

Write a paper (may be real or fictional) involving Accounting and business moral dilemmas. The paper should be 13 pages (double spaced) in accordance with APA guidelines. more des

Initial Identification - Intangible Asset Subsequent to initial identification, an intangible asset is carried at: a) Cost, less any accumulated amortization and any accumu

Audit Sampling ISA 530 Audit Sampling and Other Selective Testing Procedures defines Audit sampling is the application of a compliance or substantive procedure to less than 10

Banks under Companies Act Banks are incorporated under the Companies Act like any other business but are granted special privileges under the same Companies Act and subjected t