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Principles of Auditing Assignment (Doc)

   

Added on  2020-05-16

12 Pages2894 Words302 Views
Running head: AUDITING PRINCIPLESAUDITING PRINCIPLESName of Student:Name of the University:Author’s Note:

AUDITING PRINCIPLES1Executive SummaryThe main purpose of this report is to assess the auditing principles which are related toindependence of an auditor. The report will also be focusing on the different risks which theprocess of audit faces. The risks are assessed as the such risks in auditing are leaving rooms forin effective audit process. The report will also contain cases of accounting scandals which arecaused by companies.

AUDITING PRINCIPLES2Table of ContentsIntroduction......................................................................................................................................3Independence of an Auditor.............................................................................................................3Risks in Audit..................................................................................................................................5Literature Review............................................................................................................................7Conclusion.......................................................................................................................................9

AUDITING PRINCIPLES3IntroductionAudit is an independent process of investigation of books of accounts by an individualwho has required qualifications in order to determine whether the books of accounts are showingtrue and fair view or not. The person who conducts an audit is called an auditor. The mainresponsibility of an auditor is to ensure whether the financial statements are showing true andfair view or not (Griffiths, 2012). Many Companies have wrong conception that the mainresponsibility of an auditor is to detect fraud, but this is not the case. An auditor always has toprepare a plan which will guide him how to conduct the process of audit step by step. The threefundamental principles which any auditor must follow are integrity, objectivity andindependence (Wright & Capps, 2012). The principle of integrity states that the process of auditshould be conducted in a way which displays the level of skills and competence on the part of theauditor. The principle of objectivity states that the audit process should be conducted in aprofessional manner while collecting material audit evidences on the basis of which an auditorforms a judgement. The principle of independence states that the auditor should not be related tothe clients for which the audit is being conducted. Independence of an AuditorThe independence of an auditor is a crucial factor which affects the overall audit process.In any audit, the auditor are specifically disqualified from conducting audit for any relatedperson to the auditor. The independence of an auditor is important as the opinion of the auditneeds to unbiased and uninfluenced (Tepalagul & Lin, 2015). The auditor’s opinion on afinancial report of a company is the basis on which investors decide whether or not to invest inthe company. The auditor is responsible to the investors and it is their responsibility to report tothe general public whether the financial statements are showing true and fair view or not. In

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