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Contemporary Auditing: Real Issues and Cases Report (Assessment)


Practical Steps

The first step is to request the necessary documents that include previous audit reports and financial statements. Also, this information may include organizational charts and regulations. The second step is outlining an audit plan. Throughout this particular stage, the auditor is responsible for reviewing the obtained data and identifying any possible problems that may occur in the future. The third step is to schedule a meeting so as to present the scope of the audit to the company’s executives (Giove, 2015). The next stage of the audit consists of conducting extensive fieldwork and checking the internal controls of the audit. The fifth stage of the audit is the creation of a report that dwells on the outcomes of the audit. If any problems are in place, the auditor is responsible for providing adequate solutions to them. The last stage of the audit is a closing meeting that is necessary to summarize the results of the audit and set goals for the future. The key assertions that have to be taken into account are completeness, valuation, existence, and rights and obligations (Giove, 2015). They are pivotal because they are responsible for an adequate evaluation of assets and entities. Additionally, they serve as a validation of financial statements and are recognized as an inventory item of the audit.

Internal Audit

The role of internal audit when dealing with the assertions can be identified as fundamental due to the fact that it influences the prospects of any given organization. Internal auditors are responsible for maintaining the organization’s reputation and promoting the company’s growth while external auditors are interested in merely analyzing financial risks. Additionally, internal audit plays an important role in terms of critically affecting the organizational environment and the way the employees are treated by the executives. To expand on the topic, internal auditors present their reports to executive managers so as to outline the critical risks and accentuate the necessary improvements (Knapp, 2017). In other words, internal audit connects the stakeholders and executives so as to certify that the practices employed by the administration are effective and relevant. Also, when dealing with assertions, internal auditors are designated to preserve organizational values throughout the whole process of the audit by means of their professional insights and objectivity. To conclude, internal auditors are one of the most senior governance of any given company (in consort with both executives and non-executives).

Internal Control

The audit procedures can be significantly impacted by the internal controls. One of the key issues lies in the process of identification and testing of the risks that were previously identified by the internal auditor. These risks include the effectiveness of controls and material misstatement. Another downside of internal controls interfering with the audit process is the collection of evidence necessary to review the efficiency of controls and update the intervening data regarding the company’s financial success. In addition, this may also end up in issues concerning the reports on important controls (Knapp, 2017). The problem consists in the fact that internal controls may not be connected to the financial audit. This forces the auditors to count on internal controls so as not to increase the load on functional testing of the company’s financial statements. Most importantly, internal controls may limit the company’s access to the relevant evidence regarding the executives’ estimation of the organizational financial statements (Giove, 2015). So as to eradicate this problem, the auditors will have to employ a more active approach to the problem. In perspective, audit committees will be required to investigate the causal relationship between the defects of internal controls and the involvement of executives in the audit and subsequent decision-making process.

References

Giove, F. C. (2015). The essentials of auditing. Piscataway, NJ: Research and Education Association.

Knapp, M. (2017). Contemporary auditing: Real issues and cases. Boston, MA: Cengage Learning.

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IvyPanda. (2020, September 6). Contemporary Auditing: Real Issues and Cases. Retrieved from https://ivypanda.com/essays/contemporary-auditing-real-issues-and-cases/

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"Contemporary Auditing: Real Issues and Cases." IvyPanda, 6 Sept. 2020, ivypanda.com/essays/contemporary-auditing-real-issues-and-cases/.

1. IvyPanda. "Contemporary Auditing: Real Issues and Cases." September 6, 2020. https://ivypanda.com/essays/contemporary-auditing-real-issues-and-cases/.


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IvyPanda. "Contemporary Auditing: Real Issues and Cases." September 6, 2020. https://ivypanda.com/essays/contemporary-auditing-real-issues-and-cases/.

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IvyPanda. 2020. "Contemporary Auditing: Real Issues and Cases." September 6, 2020. https://ivypanda.com/essays/contemporary-auditing-real-issues-and-cases/.

References

IvyPanda. (2020) 'Contemporary Auditing: Real Issues and Cases'. 6 September.

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