Running head: Auditing 3
Limitations. I have learnt that in audit execution there are many problems that I can encounter
as an auditor. Some of the disadvantages are as follows. Impairment of auditors’ independence due to
conflict of interest that arises in the audit processes can cause material misrepresentation. Time
constraints for example when you have to work within certain time limits to enable the firm publish
reports on time to meet deadline which may lead to material misstatements. Fraud hazards which are
concealed by firms making it difficult for an auditor to detect them appropriately. Utilization of
professional judgement may lead to misjudgments hence material misstatement, (limitations of audit
n.d)
Principles of professional ethics. In my perspective, these are the guidelines and anticipations
that govern the way that a firm and the auditor should behave in the audit process. The professional
ethics requires the auditors to work with prudence, ensure confidentiality, be objective with their work
and ensure competency. It stipulates the minimum prerequisites of how the individuals are expected to
behave and conduct themselves in the audit process, (Duska, Duska & Ragats,2011).
Auditors independence. Auditors independence implies to the freedom of the auditor in
conducting his or her responsibilities and duties in the audit process free from intervention of the
parties who have reasonable interest in the firm, (Hopekin, 2009). This requires the auditor to exercise
integrity and objectivity in the work without interference. The auditor should not have any relationship
with the client to be able to make an accurate reasonable opinion about the financial statements which
is free from bias. The firm should also have a good set corporate governance to be able to avoid
influence to the auditors’ opinion, (Adelopo, 2010)
Regulators role. The work of audit regulators, from what I have learnt is to ensure that the firms
operate as expected in a good conduct to avoid false documentation and violations of vital issues such
as governance, the culture of firms and the tone set by firms. The regulators are also supposed to
maintain transparency and good governance by closely observing the firm’s culture, protect audit
practice independence in the firm, make sure the quality of audit is upfront compared to other income
generating activities, holding the partners who involve in audit frauds accountable of their activities. To
ensure consistency in reporting of the financial statements through use of GAAP (Generally accepted
accounting principles) rules, (Collings 2011).
Phases of audit. There are seven phases that audit process undergoes to be complete. Audit
planning. The auditors work hand in hand with the client to establish the scope of audit process, the
time needed to conduct the audit, the extent and resources that will be required during the process.
Gaining the understanding of the client. The auditor should obtain the necessary data to be
able to evaluate the potential effect of risks that will arise due to misstatement of the financial
statements.
Risk evaluation phase. Here the auditor conducts the assessment to determine what might have
gone wrong, the likeliness of things going wrong and the monetary worth of exposure to risks.
Testing controls. The auditor is required to test controls of the client to determine if the controls
are working efficiently and in the right way with which it was designed to.
Performance of the audit. The auditor in this stage ascertains if the assets and liabilities are
correct. The auditor will also check the accuracy of account balances, transactions and other disclosures.

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