Rule and Regulation of Auditing Services

This document discusses the rule and regulation of auditing services, including the external audit process, auditing standards, and the code of conduct for professional accountants. It covers topics such as the purpose of external audits, auditing standards set by the auditor general act, responsibilities of auditors to follow laws and regulations, and the code of conduct for professional accountants. The document also highlights the importance of serving the common good and stewardship in auditing services.

Running head: RULE AND REGULATION OF AUDITING SERVICES
Rule and Regulation of Auditing Services
Name of the Student
Name of the University
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Rule and regulation of auditing services
Table of Contents
Question 1..................................................................................................................................2
Question a).................................................................................................................................2
Question b).................................................................................................................................3
Question c).................................................................................................................................4
Question d).................................................................................................................................4
Question e).................................................................................................................................5
Question f)..................................................................................................................................6
Reference....................................................................................................................................7

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Rule and regulation of auditing services
Question 1
Question a)
The external audit process helps the company to comply with the all the statutory
obligations that are required to be followed by the company in order to avoid any tax penalty.
The external audit process also makes sure that the company’s internal control, processes,
guidelines and policies are accurate efficient and follow all the provisions that are made
compulsory by the government, industry standards and company policies. The external audit
also makes it sure that the reporting process prevent errors in the financial statement. The
audit report prepared by the external auditors is an essential document that is used by the
investors, company management, regulators and business partners such as lenders, suppliers
and creditors (Cohen Krishnamoorthy and Wright 2017).
The audit report provided by the external auditor provides full assurance to investors
and the participants of the financial market that a company’s accounting records are free from
any fraudulent transaction and that the report gives a true and fair picture of the financial
position of the company. The external audit report provides confidence to the investors and
other stakeholders to make investment in the company and the company will not misuse the
funds invested by the them. the stakeholders believed that the external auditors have checked
and verified all the transactions and mentioned every detail about all the transactions of the
company. The true and fair view in this sense means objective or accurate from the
perspective of audit process. The audit report of the auditors includes the balance sheet,
income statement, cash flow statement and the statement of the owner’s capital (Kassem and
Higson 2016).
the external audit is a kind of auditing practice that help to develop a finite list of
opportunities that could benefit a firm that threat that must be avoided. As the term finite

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Rule and regulation of auditing services
means, the main objective of the external audit is to prepare a exhaustive list of every
possible factor that could influence the business rather it is aimed at identifying the key
variables that the offer actionable responses.
Question b)
The section 24 of the auditor general act is made with the purpose to set auditing
standards that are required to be followed by the auditors while doing the audit process of ant
organization. The standards that are mentioned in this section are considered as the legislative
instrument. The intention of the section 24 is that audit works conducted by the ANAO
should be conducted to the same standards required by the profession of auditing (Jose Gilles
and Kelley 2016).
The section 24 contains the provision regarding the standard that an auditor should
follow while rendering the audit service. The section 24 provides the legislative framework
based on which all the provision of the audit work is performed.
Question c)
The purpose of the ASA 250 is to establish a essential requirement and to give
explanatory guidance on the responsibility of the auditor to follow the laws and regulations
that are essential for the purpose of audit of the financial report of any company.
The ASA 250 provides that the auditor shall recognize that the non compliance of the
laws and regulations may materially affect the financial report. The term non compliance as
used in this auditing standard refers to acts of omission or commission by the entity being
audited, either intentional or unintentional, which are contrary to the prevailing.
The ASA 250 also provides the provision regarding the fact that whether an act
constitutes non compliance is a lawful determination that is normally beyond the competence

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Rule and regulation of auditing services
of the profession of audit. The determination whether any act is made as per the legal
framework of audit is also defined as per the provisions given undersection 250.
The ASA 250 is issued by the AUASB in consideration of the laws and regulations
that are mandatory for the audit of the financial report pursuant to the necessities of the
legislative provision and the strategic direction that are mentioned by the AUSAB (Carson
Fargher and Zhang 2016).
Question d)
The purpose of the APES 110 code of conduct for professional accountant is to ensure
that the auditors carry on there auditing activities as per the ethical standards in order to
protect the interest of the public. The code ensures that the auditor or the accountant should
not involve in any act that is not ethical and does not cause any harm to the interest of the
stakeholders of any company (García-Marzá 2017).
The apes 110 is the code of conduct prescribed by the accounting professional and
ethical standards board. The code is based on the code of ethics for professional accountants
issued by the international ethics standards board for accountant of the international
federation of accountants. The professional accountants and auditors who are practicing in
Australia except they are controlled from doing so by appropriate laws or regulations. In
spread over the obligation delineated in the code, the members shall be directed not only in
words, but also by the ethical value given by the code.
Question e)
Common good

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Rule and regulation of auditing services
The concept of the common good states that the auditing service should be rendered
with the objective of serving for the common good of the society and the public at large. The
auditor while auditing any organization should keep that in mind that the public interest gets
protected and that the audit report discloses all the financial transactions in the fair and trued
view (Katsamunska 2016).
Stewardship
The directors and the other managers of an organization have the duty of stewardship
for the assets of that enterprise. their duties, which are embodied in the statute may include
the following
Keeping books of accounts and proper accounting records
Preparing a income statement and a balance sheet that show true and fair view
Preparing a report of the directors that are in line with the financial statements and contains
certain specified information (Badara 2017).
Question f)
The firm by rendering efficient services to the clients performs its social duties
effectively. The firm follows all the principles and guidelines prescribed by various
legislative authority in Australia and never violated any of the provisions prescribed under
the ASA standards. The audit firm is offering services to different clients from which various
offers are given to the firm to give a favourable audit report without making proper
assessment of the financial statements but the firm never do so and always follows the rules
that are specified by the authorized body regulating the audit works in Australia (Nguyen and
Kohda 2017).
Some of the instances are stated below which interprets the social responsibility of the firm

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Rule and regulation of auditing services
While rendering service to accompany named ABC Pty ltd the firm get lucrative offer
to pass their transaction without making proper investigation but the firm refuse to do so and
give a unfavourable report in the audit report.
Another instance the firm found some wrong methods of accounting while auditing
the books of accounts of XYZ Pty the management try to influence the auditor of the firm by
giving monetary benefits but in this case also the firm refuse to accept such proposal and
refused to work further with this company.
These two instances prove that the mission and vision of the firm is to serve the duty
towards the society with all care and following all the rules and framework prescribed by the
competent authorized bodies that govern the auditing profession.
Reference
Cohen, J., Krishnamoorthy, G. and Wright, A., 2017. Enterprise Risk Management and the
Financial Reporting Process: The Experiences of Audit Committee Members, CFO s, and
External Auditors. Contemporary Accounting Research, 34(2), pp.1178-1209.
Kassem, R. and Higson, A.W., 2016. External auditors and corporate corruption: Implications
for external audit regulators. Current Issues in Auditing, 10(1), pp.P1-P10.

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Rule and regulation of auditing services
Jose, D., Gilles, M. and Kelley, S.J., 2016. Audit of opportunistic immunisation of paediatric
inpatients in rural Western Australia. Australian and New Zealand journal of public
health, 40(1), pp.97-98.
Carson, E., Fargher, N. and Zhang, Y., 2016. Trends in auditor reporting in Australia: a
synthesis and opportunities for research. Australian Accounting Review, 26(3), pp.226-242.
García-Marzá, D., 2017. From ethical codes to ethical auditing: An ethical infrastructure for
corporate social responsibility communication. El profesional de la información (EPI), 26(2),
pp.268-276.
Nguyen, L. and Kohda, Y., 2017. Toward a model of wisdom determinants in the auditing
profession.
Badara, M.A.S., 2017. The relevant of contingency theory and stewardship theory on the
internal audit research. Journal of World Economic Research, 6(2), pp.17-22.
Katsamunska, P., 2016. The concept of governance and public governance theories. Economic
alternatives, 2, pp.133-141.