Quality Audit: Decisions and Factors Considered by the Auditor
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This article discusses the decisions and factors considered by the auditor in a quality audit. It covers the types of audit evidence, four decisions taken by the auditor, and four factors to be considered in which the evidence can be relied upon.
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Running Head: Audit 0 Quality audit 9/20/2019
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Audit 1 Contents Four decisions taken by the Auditor in considering the nature evidence........................................2 Four factors to be consider in which the evidence can be rely upon...............................................3 References........................................................................................................................................5
Audit 2 The quality audit is the prices in the company which helps in examining the internal and the external audit team and quality. High quality of the audit is essential in every company as it helps in achieving the goals and the objectives of the company. To meet the quality standards and conformance in the company it is important to do the internal and the external audit. The good professional opinion of the auditor is delivered and whose decision should be supported by the properevidenceandjudgmentandtheopinionshouldbereliable,understandableand independent. The quality auditor performs many riles in the company such as inspecting, monitoring, recording, correcting the deviations and inspect the operations of the company in the effective manner(Bowlin, et al., 2015). Four decisions are taken by the Auditor in considering the nature evidence There are several decisions which were taken by the auditor in the company. The major role of eth auditor in the company is to evaluate whether the financial statement of the company is free from any misstatement or not. The report prepared by the company should be fair and free from any fraud and error(Cahan and Sun, 2015).So, the auditor takes the decisions regarding the financial statements of the company and for that the sufficient audit evidence is whether the financial statements of the company are appropriate or not. The auditor takes any decisions in the company in regards to the financial statement of the company so sufficient audit reference is the number of the audit references. The four major decisions taken by the auditor are stated below: ï‚·The first decision which the auditor take is what audit procedure should they use so that reliable decisions can be taken in the company. ï‚·The second decision taken by the auditor is that while taking the audit procedure which sample size should be selected(Francis, 2011). ï‚·The third decision taken by the auditor is that which items should be selected and for items are relevant from the population. ï‚·The fourth audit evidence decision is that when the procedures of the audit should be performed in the company.
Audit 3 The amount of the evidence is important in the company so that any conclusion can be made by the auditor in regards to the internal control and the financial statement of the company. There are several pieces of evidence through which the Audit procedures can be taken such as through therecalculation,observation,inspection,confirmation,analyticalprocedures,etc.Audit procedures are used by the auditors so that they can evaluate whether the financial information of the company is accurate or not and this procedure helps in taking the decision that the whether the transactions recorded in the accounting records are correct or not(Myers, et al., 2014). The audit evidence can be of several types such as documentation, observation, confirmations, physical examination, etc. These types of audit evidence help in examining and inspecting whether the information provided is free from any material misconduct. The person can rely more on this evidences than the audit. Four factors to be considered in which the evidence can be relied upon Materiality:The financial statement provided by the company should be free from the material misstatement. The statement made by the auditor should not be made under any influence, coercion or under any pressure. The statement made by the auditor in regards to the financial statement should be true and fair. Inspection of the document: The evidence made by the auditor are reliable when the documents presented by the company are properly inspected by the auditor. Sometimes the companies make fraud and represent the false appears which creates many problems. So the documents provided by the company should be properly accessed(Myers, et al., 2014). Inquiry of the things:It is also an important factor as to inquiry the things deeply is very necessary that the evidence provided is correct or not. The auditor has to inquiry every detail that the documents presented by them should be free from any fraud and errors. They should deeply review the documents and then only rely on certain things. Internal control:The auditor should not access the financial statements of the company but they should also analyze how much interval controls the company has. The auditor of the company analysis the internal control as it helps in ensuring the accounting information and the financial
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Audit 4 information and prevents the company from fraud and accounting. It is the mechanism on the company which in which the evidence can rely on(Tepalagul and Lin, 2015). There is the five process of the audit process which are section phase, execution phase, planning phase, reporting phase, follow up. The auditor reviews the company financial statement by a proper accounting process which is also known as the audit cycle where the auditor reviews the financial performance of the company. The auditor ensures that before releasing any financial statements that the information provided them is accurate or valid. To carry out the specific operations or the task in the company the inspector inspects the suitability. The inspections are done in the company to analyses the vessels vessel are fit or not and objectives of the audit can be achieved product line of the products as it help in taking the essential decisions. Audit effectiveness and suitability is very essential in the company as the company will get the desired results, the resources used in the company are being used nicely, it helps in minimizing the cost and operating the functions(Khlif and Samaha, 2014).For improving the performance of the company, the auditor gives the advice which is mandatory for the surveillance to the manager and the board of the directors of the company so that they can improve the financial performance of the company and run the business activities in the effective manner.
Audit 5 References Bowlin, K.O., Hobson, J.L. and Piercey, M.D., 2015. The effects of auditor rotation, professional skepticism, and interactions with managers on audit quality.The Accounting Review,90(4), pp.1363-1393. Cahan,S.F.andSun,J.,2015.Theeffectofauditexperienceonauditfeesandaudit quality.Journal of Accounting, Auditing & Finance,30(1), pp.78-100. Francis, J.R., 2011. A framework for understanding and researching audit quality.Auditing: A journal of practice & theory,30(2), pp.125-152. Khlif, H. and Samaha, K., 2014. Internal Control Quality, E gyptian Standards on Auditing and External Audit Delays: Evidence from the E gyptian Stock Exchange.International Journal of Auditing,18(2), pp.139-154. Myers, L.A., Schmidt, J. and Wilkins, M., 2014. An investigation of recent changes in going concern reporting decisions among Big N and non-Big N auditors.Review of Quantitative Finance and Accounting,43(1), pp.155-172. Tepalagul,N.andLin,L.,2015.Auditorindependenceandauditquality:Aliterature review.Journal of Accounting, Auditing & Finance,30(1), pp.101-121.