An audit is an evaluation of an organization, system, , project or product. Accounting sector declares an audit as an independent assessment of the fairness by which a company's financial statements are presented by its management. eIt is done by specialist and inteligents people in the field, independent and objective person or persons, known as auditors or accountants, who then issue a report on the results of the audit.
They give details about validity and reliability of financial information, and provide an assessment of a company
List of the various threats to integrity, objectivity and independence of auditors
The various threats are.
1.Familiarity Threat
2.Self-review Threat
3.Intimidation Threat
4.Self-interest Threat
5.Advocacy Threat
An Auditor is expected to be independent, competent and of high integrity.
Under statue and guidelines it is expected that a person to be an auditor must possess the listed qualities of being independent in carrying out is audit assignment must be free from any form of influence within or outside the management to guarantee a fair and honest audit statement. In the same vein the competent of an auditor is very necessary an auditor must not engage in an audit in which he is technically incompetent.
Integrity of an auditor is perhaps the most important, and must be proven to be truthful honest before it can be given any audit assignment.
{iii} What are the factors that may impair the independence of an Auditor?
{a} if he has any financial involvement in the business or affairs of the enterprise..
B} Where the auditor is related to an officer of the proposed client’s enterprise
C}If the Auditor is a partner of or in the employment of an officer or servant of the company
D}If the auditor is acting in a consulting capacity or advices the biz in respect of secretariat, taxation of financial management.
Explanation of the above qualities in details
The qualities of an Auditor which are:-
Independent: By independence it means in carrying out an audit assignments an auditor must be completely free from any form of influence and must not be involved.if any financial activity of In the enterprise which could impair his/her independence when implementing the audit assignment.
Competent: An auditor is expected to have the ability to carry out the audit, he must not under state any assignment in which he is technically incompetent in implementing of audit assignment.
Integrity: This is perhapsthe ost important of all the qualities of an auditor,it implies being hionest,truthfull and fairness in dealing an implementing his audit engagement i.e An auditor must be seen to a honest person he must have the filling attributes.
A}Prepare all reports with integrity
B} Should call upon the institute for confidential advice
C} Should not involve in dishonest transaction
D}He Should comply with technical and professional standard
E}Most ensure audit statement are truth and fair.
Suggestion which may go beyond the provision of the ethical guide
clients position or opinion to the point that objectivity is or is perceived to be imprired
Familiarity Threat:Occur when by virtue of a close relationships with an audit client,its directors,officers or employees a firm or a member of the audit team becomes to sympathetic to the clients interest.
IntimidationThreats:Occur when a member of the audit team may be deterred from acting objectivity and exercising professional skepticism by that threats from the directors officers or employers of an audit client.
AN AUDITOR IS EXPECTED TO BE
Independent
Component
Independent:This means that an auditor must not have financial involvement in the bussiness or affairs of the enterprise and bussiness or affairs of the the enterprise and must be able to plan,execute and reports its finding to member of the enterprise without undue influence either from the within or outside the bussiness organisation.
Component:This means that an auditior as expected to be hard worjking in the implementation of the audit assignment.
Of high Integrity:The word intergrity means to be honest,fair in dealing and to be expexted to be honest,truthful and faithfull in the implementation of the audit assignment
FACTORS THAT MAY IMPAIR THE INDEPENDENCE OF AN AUDITOR
1.Familiarity:This may impair the independence of an auditor because when an auditor becomes soo familaiar or close with the directors,officers,this can ban impair the independence of an auditor.
2.The independence of an auditor can be impaired if the auditior is financially involved in the bussiness or the affairs of the enterprise
3.The independence of an auditor can be impaired if an auditor is discovered to be biased in the report of his findings.
4.The indepence of an auditor can be impaired if individual who are not part of the audit team are allowed to influence the report findings of the auditors
FACTORS TO IMPROVE AUDITORS INDEPENDENCE:
1.Prohibition of individual who are not part of the audit team from influencing the outcomeof the reports findings of the auditors:
2.Communicating policies/procedures relating to independence to all staff.
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