Responsibilities of Auditors in Fraud Detection and Internal Control Weaknesses in a Restaurant

Running head: AUDITING
Auditing
Name of the Student
Name of the University
Author’s Note

1AUDITING
Table of Contents
Introduction................................................................................................................................2
Requirement [a]..........................................................................................................................2
Requirement [b].........................................................................................................................3
Requirement [c]..........................................................................................................................3
Requirement [d].........................................................................................................................4
Requirement [e]..........................................................................................................................4
Requirement [f]..........................................................................................................................5
Requirement [g].........................................................................................................................5
Conclusion..................................................................................................................................6
References..................................................................................................................................7

2AUDITING
Introduction
Auditing is the process of methodical examination as well as inspection of the
financial statements of the companies with the aim ensure that they are free from material
misstatements. It needs to be mentioned that the auditors have a key responsibility of
detecting errors and fraudulent activities in the financial statements of the companies that can
lead to material misstatements in them (William Jr, Glover and Prawitt 2016). It puts the
obligation on the auditors to examine the internal control of their clients in order to identify
the loopholes in them that can be a major reason for frauds. The main aim of this report is to
discuss about the responsibility of the auditors in the detection of fraud through the
consideration of the provided case. This report also takes into consideration the identification
of the weakness of the internal control in the restaurant.
Requirement [a]
The auditors have certain responsibilities towards the financial frauds in their clients’
businesses. According to ASA 240, it is the responsibility of the auditors to obtain the
reasonable as well as adequate assurance that the financial statements are free from material
misstatements whether caused by errors or frauds. In this process, the auditors are needed to
maintain the professional scepticism (legislation.gov.au 2019). In this process, the auditors
are needed to obtain sufficient undertaking about the business activities and environment of
the audit client. After that, the auditors would involve in the identification of the risks of
material misstatements due to fraud. After that, on the basis of the evaluation of the obtained
audit evidence, the auditors would apply the suitable analytical procedures for the reduction
of audit risk due to fraud. Lastly, they are needed to document them through written
presentation (Othman et al. 2015).