Auditor Shall Be Liable to Responsible to the Fraud Essay

601 WordsApr 10, 20153 Pages
(First situation) Auditor shall be liable to responsible to the fraud whenever: Lack of Professionalism Negligence of Auditors’ duties “Without reviewing any large or unusual transaction or journal entries that occur outside the normal scope of the business " (explain) 2. Lack of Professional Scepticism Professional skepticism 18. The auditors plan and perform an audit with an attitude of professional skepticism in accordance with Statement of Auditing standards (SAS 100) "Objective and general principles governing an audit of financial statements". Such an attitude is necessary for the auditors to identify and properly evaluate, for example: a. matters that increase the risk of a material misstatement in the financial statements resulting from fraud or error (for example, management's characteristics and influence over the control environment, industry conditions, and operating characteristics and financial stability); b. circumstances that make the auditors suspect that the financial statements are materially misstated; c. evidence obtained (including the auditors' knowledge from previous audits) that brings into question the reliability of management representations. In accordance with International Standard on Auditing (ISA) 2005, the auditor shall maintain professional skepticism throughout the audit, recognizing the possibility that a material misstatement due to fraud could exist, notwithstanding the auditor’s past experience of the honesty and integrity of the entity’s management and those charged with governance. Where responses to inquiries of management or those charged with governance are inconsistent, the auditor shall investigate the inconsistencies. (Don’t talk too long on this)..Briefly bring it 3. Lack of Communication "Without meeting the management to gain an understanding of procedure and test those procedures for

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