Auditing Theory and Practice: Standards, Auditor Duties, and More

This assignment solution provides an overview of auditing theory and practice, addressing key concepts and standards. It identifies relevant auditing standards for various items like inventories, audit documentation, and special reports. The solution clarifies the primary responsibility of an auditor, emphasizing the importance of ensuring financial statements present a true and fair view rather than solely focusing on fraud detection. It also discusses the communication between predecessor and successor auditors and defines the confirmation process, referencing AS 2310. Desklib offers a wealth of similar solved assignments and past papers to aid students in their studies.

Running head: AUDITING THEORY AND PRACTICE
Auditing Theory and Practice
Name of the Student:
Name of the University:
Author’s Note

1
AUDITING THEORY AND PRACTICE
Table of Contents
Answer to Question 1......................................................................................................................2
Answer to Question 2......................................................................................................................3
Answer to Question 3......................................................................................................................3
Answer to Question 4......................................................................................................................3
Reference.........................................................................................................................................4

2
AUDITING THEORY AND PRACTICE
Answer to Question 1
Term Auditing Standards
Inventory AS 2510- Inventories
Audit Documentation AS 1215- Audit Documentation
Special Reports AS 3305- Special Reports
Public Warehouses AU 901- Public Warehouses
Audit Evidence AS 1105- Audit Evidence
Required Supplementary information AS 2705- Required Supplementary
Information
Consideration of Materiality AS 2105- Consideration of Materiality in
Planning and Performing an Audit
Confirmation AS 2310- The Confirmation Process
Audit Risk AS 1101- Audit Risk
Work of a Specialist AS 1210- Using the Work of a Specialist
Subsequent Events AS 2801- Subsequent Events
Client’s Lawyer AS 2505- Inquiry of a Client’s Lawyer
Concerning Litigation, Claims and
Assessment
Accounting Estimate AS 2501- Auditing Accounting Estimates
Risk of Material Misstatement AS 2110- Identifying and Assessing Risk of
Material Misstatement
Interim Financial Information AS 4105- Review of Interim Financial
Information

3
AUDITING THEORY AND PRACTICE
Audit planning AS 2101- Audit Planning
Audit Sampling AS 2315-Audit Sampling
Answer to Question 2
The primary responsibility of an auditor is to examine the financial report of a company
and form an opinion on the same whether it is showing true and fair view or not (Chui & Pike,
2013). Therefore, many businesses have a wrong opinion that the primary responsibility of an
auditor is to detect frauds and error which is not the case. The primary responsibility of the
auditor is check whether the financial statements are fairly represented as per the accounting
regulations, principles and standards and whether the financial statements are showing true and
fair view or not.
Answer to Question 3
As per para 11 of AS 2610 “Communications between Predecessor and Successor
Auditors” states that the predecessor auditor can make himself available to the successor auditor
to discuss the working papers or about the client or the successor audit can request the help of
Predecessor auditor.
Answer to Question 4
Confirmation may be defined as the technique which is used by the auditor of the
company for the purpose of confirming an item of the financial statement. For example, an
auditor can request an external confirmation for the value of debts that the business owes from
the creditors of the company (Titera, 2013). The confirmation part is covered in AS 2310- “The
Confirmation Process”

4
AUDITING THEORY AND PRACTICE
Reference
Chui, L., & Pike, B. (2013). Auditors' responsibility for fraud detection: New wine in old
bottles?. Journal of Forensic and Investigative Accounting.
Titera, W. R. (2013). Updating audit standard—Enabling audit data analysis. Journal of
Information Systems, 27(1), 325-331.