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AUDT317 Auditing assignment

   

Added on  2019-10-30

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IntroductionIn this assignment we are going to discuss in detail the concept of audit and its technologies andabout the assurance. Audit means the inspection of the record of an organization about itsfinancial or non financial transactions by a qualified team or an individual accountant. Audit isimportant for an organization because if the firms do not conduct an audit then it will not be ableto produce correct financial reports for its employees and clients or for potential buyers[ CITATIONBec14 \l 1033 ]. Now if talk about assurance then it is a process or a service that is provided tofirm by a certified accountant[ CITATION col17 \l 1033 ]. In assurance service the charteredaccountant provides financial information to the organization through which the firm makesbetter decisions. This information provided by the accountant helps the firm to access the riskthat are on the way of the firm and the firm then avoid these risks by planning against them.Hence assurance is a service provided by a certified accountant in order to let firm know whatrisks they might face in the coming future.Critical AnalysisA)This part of the assignment contains deep discussion about the audit and assurance.Ethics play an important role whether in a business or in any other profession. Ethicsmeans a belief of understanding that what is wrong and what is right, ethics are the moralstandards, moral principles of a person. There is a very important role of ethics inauditing and assurance, No single activity or profession can work without ethics. In thebusiness world business ethics are everything, they are the moral structure of theorganization that how the business entity will deal with its client, suppliers etc. Ethics areput into things to make the things more transparent and genuine[ CITATION twi13 \l 1033 ].When an organization wants to conduct auditing and assurance activities, they take theservices of the certified chartered accountants, and these accountants then are required toprepare and submit their audit or assurance report with full honesty by keeping in mindtheir ethics. The ethical requirements in completing and submitting the audit andassurance report are as following[ CITATION Cha17 \l 1033 ]:Integrity: An accountant must have the basic ethic of integrity. Integrity means beinghonest towards something. The certified accountant do not hide, anything whether it mayresult in a loss to the organization, he must disclose all the hidden and wrongly donetransactions of the organization, so that the firm can use this information in order to makethe operation of the business successful.Confidentiality: This is the most important ethic that an accountant must have.Confidentiality means keeping a secret. An accountant is a person that has all theimportant and confidential financial information of a company. This information, if used

wrongly can adversely affect the public image of the organization. An accountant mustkeep the confidential information of the organization safe and secure and should respectthe ethical requirement of confidentiality and must not use this information for personalbenefits. Objectivity: The meaning of objectivity is being impartial or unbiased. A certifiedaccountant must be unbiased towards the judgments. Any conflict of him with anyorganization must not affect the objectivity of his auditing and assurance report. Professional Competence: The responsibility of an accountant is to provide continuousfinancial services to his clients. It is his ethical duty to be up to date in terms of havingknowledge about any new thing in accounts. Professional Behavior: An accountant must always behave with his client in aprofessional manner and must complies himself according to the laws and regulationsthat are formed by the associations of the accountants.Above are the ethical requirements and responsibilities that must be fulfilled before submittingthe audit and assurance report. An accountant with the understanding of all these ethicalrequirements will always make sure that the client organization achieves favorable results andthe accountant will also help in assessing the risk and providing other useful information to theclient[ CITATION Ran09 \l 1033 ].B)Now we will discuss about the purpose, content, format & methodologies that arenecessary to provide assurance and audit services especially in the areas of riskassessment, audit planning, audit execution and formulations of opinions. The idea of riskassessment in audit planning is not a new concept, it is two decades old. It is a process offocusing on those parts of the organization that are most at risk of material misstatement.Material misstatement refers to those statements that if entered wrong in the financialinformation of the organization then it will affect the decision of the user of that financialinformation[ CITATION Adr11 \l 1033 ]. This is the reason why auditing in risk assessmentis important. An internal control system is a process in which it is ensures that theorganization is compiling up with all the laws and regulations and which keeps theorganization away from risks. If we now talk about the content that is necessary toprovide an assurance and audit service are, the general ledger, trail balance, copies ofloans, record of the purchase of fixed assets, depreciation schedule, payroll reports etc arethe content that is audited at the time of audit and assurance[ CITATION Cou00 \l 1033 ].General Ledger: General ledger or in simpler words the main accounts of the company,the organization in this advance era of technology can use various accounting informationsystems that will maintain their general ledger[ CITATION Inv15 \l 1033 ], the general ledgerthen can be sent to the auditor, this main account will let know the auditor that how muchto audit.

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