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South African Audit Practice Statement - PDF

   

Added on  2021-06-17

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Running head: AUDITING STANDARDS ON RISK MANAGEMENT 1Risk Analysis, Detection & Management in South AfricaStudent’s NameInstitutional Affiliation
South African Audit Practice Statement - PDF_1

AUDITING STANDARDS ON RISK MANAGEMENT2Introduction;Review on audit standards in the South African market is seen to explain and regulatehow audit process is to be conducted so as to provide the face of truth and fairness pursuant torequirement and compliance state set in the International Standards on Audit. Audit in SouthAfrica is likewise guided by South African Audit Practice Statements (SAAPS) that outlines andguides on audit start, review, assurance and skeptic-related issues that should be in conformitywith International Standard on Audit requirement in lieu.It is from this standards i.e. both SAAP and of course the pillar of audit ISA that a distinctionbetween management fraud and defalcation is drawn. SAS No 82 states that the main distinctionbetween management fraud and defalcation (Burkley,2018) is the urge or intention of conductingthe activity as well as the co-purpose on the result. Management fraud entails a deliberate orrather intended use of fraudulent or misleading financial statement to wrongly blackmail andinform the users of these statements both internal and external i.e. suppliers, investors,shareholders, owners, customers and the general public. On the hand defalcation ismisappropriation and misallocation of company resources mainly assets and funds. It is therefore certain that the two aspect are differentiated by the intention or notion whereinmanagement fraud the main aim of the management is to misinform, mislead and misguide theconcerned by feeding with info that changes their mind on the negative thoughts they had on thecompany thus creating an extension room for continuing doing wrong in the expense ofmisinforming innocent minority parties. This fraud happens when management integrity isdiluted by ill motive minds and opportunistic in management. Defalcation is however committedand indulged into out of greed, selfishness and ill motive personal interest.
South African Audit Practice Statement - PDF_2

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