Procedures followed in conducting an audit, Auditing

Procedures followed in Conducting an Audit

Procedures generally followed in conducting an audit by more than one firm of accountants and the division of work between them.

All auditors may be liable to the consequences of loss arising from negligence.  Each joint auditor accepts all the obligations of the office of auditor and this can mean that losses flowing from a wrong auditor's report may be recovered from either of both auditors.  Thus a joint auditor might be financially responsible for losses arising as a consequence of the negligence or incompetence of his fellow auditor.

Before accepting a joint office, an auditor must:

1. Consider whether he is prepared to serve jointly with the other auditor.  He may well ask himself if he would take him as a partner.

2. Assure him that adequate review and control of all aspects of the audit can be prepared.

3. Ensure such professional indemnity insurance cover can be acquiring to cover the individual situation.

Several possible arrangements could be made:

1. Each joint auditor could conduct its own audit with its own standard documentation and files.  Leading schedules would need to be photocopied and exchanged.

2. A unified set of documents and files could be produced by both firms.  This may involve some modification of each firm's methods.

3. Each firm could use one standard set of documents and files using the standards of the larger of the two firms.

Whatever the techniques is used, extensive conversation and planning must lead the commencement of any audit work.

The considerations that are likely to dictate the division of work are as:

i.     Expertise: Each firm may have individual expertise as in specific kinds of client, computers etc.

ii.    Geography: The particular place of the firms and their branches must be believed.

iii.   Competence: One of the joint auditors may be particularly competent along with small clients, the other along with large clients.

iv.   Availability and Size of staff.

v.    Cost: Audit costs may be minimised through a particular division of work.

 

Posted Date: 1/28/2013 5:27:43 AM | Location : United States







Related Discussions:- Procedures followed in conducting an audit, Assignment Help, Ask Question on Procedures followed in conducting an audit, Get Answer, Expert's Help, Procedures followed in conducting an audit Discussions

Write discussion on Procedures followed in conducting an audit
Your posts are moderated
Related Questions
Audit Reports - Going Concern In the vast widely of cases, the going to relate assumption is suitable and whether applied no mention require be made in the auditor's report.

Assertions about account Assertions about account balances at the duration end: a) Existence -assets, equity and liabilities interests exist. b) Obligations and Ri

what are the things we need to check in statutory audit of bank?

Problem : As per the Field Standard (INTOSAI), competent, relevant and reasonable evidence should be obtained to support the auditor judgement and conclusions regarding the org

AsList and define five audit procedures for obtaining audit evidence. (ii) Why is it necessary to obtain corroborating evidence for inquiry and observation? (iii) What is the dif

Valuation - Detailed Audit of Stock IAS 2 prescribes such stock be priced at the lower of price and net realizable price, It is up to the auditor to ensure that net realizable

1. Demonstrate knowledge of the current tax, auditing and accounting issues that concern governmental and not-for-profit entities 2. Explain the difference between various funds (

Objectivity - External Auditor Report Many accounting figures are subjective and contain substantial terms of subjective judgment.  Many more business transactions have financ

The auditors for Weston University are conducting their audit for the fiscal year ended December 31, 2011. Specifically, the audit firm is now focusing on the audit of revenue from

Issues in Audit of Intangible Assets The two key issues in such audit of intangible assets are: (a) Recognition of intangible assets The audit problem here is to mak