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

#what are the procedures of conducting audit for the first time#

Step 1: Determine learning objectives. Considering the importance of a course, its placement in a program of study, and its role in providing a base of knowledge to be built upon

1. On 5 August 2012, the financial controller informed you that the board has recently received a letter from the assistant general manager, Mr. Tan. The letter contains a confessi

What is an external auditor's responsibility in regard to finding fraud?

Financial Instruments - IAS 32 and IAS 39 IAS 39 and IAS 32 are examinable to the extent such they deal along with the presentation and measurement of equity, debt or else con

Firm valuation refers to the total value of a firm in the capital market. It is the stock price of a firm times its outstanding shares. Total value of a firm is also called market

Assertions about disclosure Assertions about disclosure and presentation : a) Rights and Occurrence and obligations -disclosed transactions and events and other issues

Examination of Deeds Make Sure that the mortgage is in the name shown in the advance records; That there is a document of title to the property within mortgage and that