ipl-logo

Australian Auditing Standards Essay

1467 Words6 Pages

A)
While performing an audit, expertise in the field of accounting and auditing only is not sufficient. In the preparation of financial report involves the use of expertise in a field other than accounting and auditing, the auditor, who is skilled in auditing and accounting may not possess the necessary expertise to audit that financial report. Thus, Australian Auditing Standard has included some provision through its standard in which an auditor can use the work of an Auditor’s Expert. Australian Auditing Standard (ASA) 620 defines the provision of use of work of auditor’s expert. To determine whether to use the work of auditor’s expert ASA 620 defines as:-
Determining the need for an Auditor’s Expert:
• Obtaining an understanding of the entity and its environment, …show more content…

As the audit progresses, or as circumstances change, the auditor may need to revise earlier decisions about using the work of an auditor’s expert. So, If need arises to revise earlier decision of using the work of an expert, we can decide accordingly to whether or not to use the work of an expert.
As per ASA 300, Planning and Audit of Financial Report deals with the auditor’s overall responsibility to plan an audit of a financial report. Planning an audit involves establishing the audit strategy for the engagement and developing an audit plan. Adequate planning benefits the audit of a financial report in several ways.
To set up the total audit strategy, which decides the period, time and direction of the audit and it guides the development of the audit plan. During the audit of DIPL also, as per ASA 300, planning is needed.
a)
during the planning stage by analysing all the information contained in the case, five factors that influence determination of preliminary figure of overall materiality for the 2017 audit of DIPL are as

Show More
Related
254 Words | 2 Pages

ABC offers separately priced extended warranties for appliances sold that are non-refundable and have no limits to the potential cost of honoring the warranty. Although ABC does track warranty profits and losses by appliance type, assume that no analysis has been performed to determine the rates at which cost are incurred throughout the warranty period. Assuming that manufacturer warranties provide coverage for the appliance for 1 year from the date of purchase, when should revenues and expenses of such warranties be recognized? FASB Accounting Standards Codification (ASC) topic 605-20-25-3 (Revenue Recognition) states that in regard to extended warranties “revenue shall be recognized in income over the period in which the seller is obligated

Read More
529 Words | 3 Pages

I need go through last year audit file and report to gain understanding of the entity, its nature, the principal activities carried on, accounting policies, and critical audit area And test checked trial balance, balance sheet and profit or loss statement to general ledger to ensure they are agree to each other because there is possible clients make changes in general ledger after financial statement has been prepared. I also need checked the opening balance of balance sheet items with last year audit report to ensure the amounts are agreed with last audited figure. Before do the audit, I need fill in audit control sheet then do audit planning and planning materiality

Read More
1005 Words | 5 Pages

Under ASA501 an auditor is obliged to obtain sufficient evidence of the existence and condition of inventory by attending the stock take unless it is impractical to do so. Before the stock take the auditor should review and plan for the stock take by identifying the location of goods, examining the control and recording process for inventory and timing of the count of inventory. The auditor also needs to identify any issues with the procedures of internal control. For example, if the counting process is inadequate then this

Read More
1827 Words | 8 Pages

The FASB Accounting Standards Codification (FASB Codification) is the only source of authoritative GAAP apart from SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update to inform people about changes to the FASB Codification, which includes changes to non-authoritative SEC content. In relation to International Financial Reporting Standards (IFRS), after a new IFRS Standard is issued and before it becomes effective, the International Accounting Standards Board (IASB) helps stakeholders to understand the new Standard's principles very well. The activities of the board promote greater consistency in stakeholders' understanding of new Standards as the practice develops, which supports

Read More
570 Words | 3 Pages

On the other hand, financial auditing serves as a crucial business practice which provides solutions to ensure financial activities and information, including financial statements, adhere to professional standards such as GAAP. Interestingly, financial auditors could oversee IT auditors to generate audit reports for internal business purposes. This collaboration between the two teams contributes to enhancing organizational processes and facilitating the achievement of the company's goals and objectives. This newfound knowledge has expanded my understanding as well. Initially, I perceived IT audit and financial audit as parallel disciplines with little collaboration or intersection.

Read More
260 Words | 2 Pages

Answer B: If planning an audit for Verizon Communications Inc., it is more appropriate to allocate planning materiality to the balance sheet instead of the income statement accounts because Verizon utilize a double-booking accounting system for which most of their income statement misstatements will have an equal effect on the balance sheet. Therefore, a reasonable material threshold is determinable as a percentage of total assets, total liabilities, and total equity. Additionally, since the financial statement users are concerned with the growth of the company and its ability to generate revenue, operating income before taxes is the appropriate account to populate a materiality threshold. Total Assets: The appropriate preliminary judgement

Read More
618 Words | 3 Pages

Fair Work Commission Australia is an independent body which has the authority in setting minimum employment standards (wages) and requirements to ensure fairness during the employment phase (Fair work commission, n.d). Therefore, employers had the responsibilities to ensure that their employees are well taken care of. As the industries are changing rapidly over the years, employers are required to take note on the fair employment practices to ensure that the employees are motivated to perform their duties to achieve the organisation goal. Discussion on labour and supply demand, efficiency wage theory, performance evaluation and pay for performance will be mentioned in the article on what employers should focus on and provide a healthy working environment for their employees.

Read More
458 Words | 2 Pages

Auditing, a dynamic assurance model, has played an essential role in the economic environment in the last few decades. Specifically, it increases the credibility of professional accounting and ensures market integrity. Auditors prove that a company's financial records and accounting procedures comply with the regulation by reviewing financial statements and records. In the early 2000s, there were some major corporate collapses and audit failures, which have threatened the credibility of the audit function such as the collapse of Enrol followed by the fraud in WorldCom and collapse of Arthur Anderson or the collapse of HIH insurance in Australia. Hence, acquiring more knowledge about the recent changes in the audit and financial reporting environment is very important (Leung, Coram, Cooper & Richardson, 2015, pp. 4-43).

Read More
959 Words | 4 Pages

Nowadays, many small business entities in the marketplace are looking for a cheaper way for the auditors to obtain the financial information. In order to reduce the auditing cost, some people mention that different levels of audit standards are needed. The article "An audit is an audit, or is it?", written by Phil Cowperthwaite on the CPA Magazine, talks about whether should the society pare down the audit standards or should the audit-lite exist and the importance of maintaining all audit standards at the same level. Phil primarily discusses different user expectations of an audit, include board members, creditors, and management. Phil illustrates his thoughts which the pared down of audit standards cannot meet people's desires, even it is cheaper for users to obtain the assurance for information.

Read More
1181 Words | 5 Pages

Independent auditors likewise will need to understand this technology as it is implemented at their clients. Both the role and skill sets of CPA auditors may change as new blockchain-based techniques and procedures

Read More
819 Words | 4 Pages

PREVENTION METHOD IN AUSTRALIA AND NEW ZEALAND Given the high cost of fraud to the Australian public sector organizations, prevention needs to be a key priority. From the survey results indicate that organisations remain focused on traditional prevention methods: 1.

Read More
1413 Words | 6 Pages

On the other hand, company needs to spend time and money to find another accounting firm to help it to perform non-auditing services. If auditors are doing both auditing and non-auditing for the same issuer, they could be more efficient in doing their jobs independently. As a result of the rule, many accounting firms that are currently providing auditing services for issuers would lose a way to earn more money since they are no longer allowed to perform some non-auditing services to these issuers. In addition, because companies will need to provide their confidential information to additional accounting firms that are providing non-auditing services, the possibility for information leakage to happen will increase. We believe that the rule have some effects in encouraging auditors to act properly by controlling auditors’ power over the issuers’ financial statement and accounting records, but the influence is limited.

Read More
1616 Words | 7 Pages

Analysis • This section is regarded as the most critical step in writing an effective accounting memo by bringing together the required facts of the research, any supporting authoritative literature, and an accountants overall evaluation before forming a conclusion. • Analysis includes information from relevant guidance, along with an accountant’s own words about how the guidance is applicable. • The memo should contain enough authoritative guidance that the user will not need to perform additional research in the Codification. • Make sure to utilize the concept known as the “guidance sandwich.”

Read More
1656 Words | 7 Pages

The paper will calculate the financial ratios of company that will be interpreted with the implications of ratios. Moreover, the paper will describe the indicators of fraudulent reporting. Discussion Purpose of Income Statement It is also called profit and loss statement or income or expense statement. The main purpose of income statement is to indicate managers and investors whether the organisation was cost-effective

Read More
2512 Words | 11 Pages

5 Businesses or organizations throughout the world exhibit their own audit controls as well as observe specific procedures. When addressing IT audit issues, a business such as Asplundh Tree Expert, Inc. are known for their efficient audit procedures and internal practices. IT audit process effectiveness happens when an organization or business is adhereing or responding to set procedures. An organization may conduct several diverse audits, but consequently regardless of the audit type used, an audit is done to ensure a business or organization are using all resources available to them and for their benefit. Diverse IT audit selection ensures that the company set and meet goals and objectives that have been laid down by the international standards

Read More

More about Australian Auditing Standards Essay

Related Topics

Open Document