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.