Auditor’s Responsibility to Review Governance of Audit Client

qwertyuiopasdfghjklzxcvbnmqwerty
uiopasdfghjklzxcvbnmqwertyuiopasd
fghjklzxcvbnmqwertyuiopasdfghjklzx
cvbnmqwertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghjklzxc
vbnmqwertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghjklzxc
vbnmqwertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmrtyuiopasdfghjklzxcvbn
mqwertyuiopasdfghjklzxcvbnmqwert
yuiopasdfghjklzxcvbnmqwertyuiopas
dfghjklzxcvbnmqwertyuiopasdfghjklz
xcvbnmqwertyuiopasdfghjklzxcvbnm
qwertyuiopasdfghjklzxcvbnmqwerty
Auditing

Audit
Question 1 (7%)
Justification of the auditor’s responsibility to review the governance of an audit client
In relation to ASA 300, the auditor ensures that the audit process is undertaken based on the
same. This auditing standard assists an auditor to plan the audit of financials and sets out how
it will be performed. Therefore, it is crucial that the audit planning is properly documented
and their level will range based on the audit’s complications and size. Moreover, small and
simple involvements may play a key role in covering the audit phase but complicated or
larger audits can have significant audit plans. Nevertheless, in determining whether
documentation of audit is effective or not, the experience of auditors is very vital so that the
planning decisions are appropriate in achieving overall effectiveness. The primary outcome
from the planning scenario of an audit is the proposed or expected audit plan that is compiled
through the usage of several sources of information and which can be easily accessible to the
auditors. Furthermore, the planning must be regular and often throughout the plan of
engagement. In addition, such audit plan must be properly updated during the entire audit
course as and when required. Nevertheless, the audit plan must be dependent on the auditor’s
knowledge of the entire company and its businesses that includes a deeper understanding of
all auditing, accounting, and legislative requirements. Further, the audit must also understand
the procedure for preparing deadlines and financials. With the assistance of ASA 315,
auditors can assess and identify risks of material misstatements through an organization’s
environment (Hoffelder, 2012). This standard emphasizes the significance of such knowledge
in recognizing wherein such risks are more likely to incur. Nonetheless, ASA 300 can assist
in performing preliminary engagement affairs that includes assessment of auditors’ own
compliance with significant lawful necessities to document and establish an aggregate audit
plan that can set the timing, scope, and direction of audit processes.
Impact on raising
audit risk
Recommendation Reduction in audit risk
because of the
recommendation
Non financial
risk
The non financial risks
lead to alteration of the
Stronger board and
executive level
When the board and the
executive level performs
2

Audit
nature of the audit.
There can be failure in
compliance,
operations, etc. Audit
risk will lead to signal
the fact that the
financial statements are
free from error but in
the true sense it
contains some
deficiencies.
governance in n effective manner then
the governance is of high
standard. This leads to
effective planning and
ultimately the risks are
curbed, as well as
minimized (Apra, 2017).
Unclear
accountabilities
This implies lack of
ownership of major
risks at the Executive
Committee level. In
short the risks are left
unanswered and hence
might create a major
issue for the
functioning of the
company.
Accounting
practices influenced
by the
remunerations
practices
Implementation of
accountability standards.
Such standard are
reinforced by the
remuneration practices.
When the standards are
properly placed it leads to
minimize the risk and
brings in more
transparency.
Complex
decision making
process
Complex and orthodox
manner of decision
making skills makes
the system slow in the
detection of the risks
and uncertainties.
Infusing of the CBA
DNA
All the dealings should be
supported by the dealings
and decisions on
customers. This will
ensure a smooth decision
making process and
thereby will curtail the
risk level (Apra, 2017).
Immature
compliance
function
Operational risk
management that is
followed by the
Cultural changes to
enhance the process
Challenging and striving
for the best is the best
remedy. It helps in
3