Relationship among audit client and external users

relationship among audit client and external users

Compare The Relationships Among Auditor Client And External Users. 2. Compare the responsibilities of internal auditor and external auditor in relation to: I. The relationship between the audit committee and both external and internal . and, to a certain extent, shareholders and financial statement users), as well as the regarding errors and irregularities (SAS 53), illegal acts by clients (SAS 54), . 26 Relationships Among Auditors, Client, and External Users Auditor Client External Users Client or audit committee hires auditor Auditor issues report relied .

relationship between the auditor, client, and external users

Consequently, we will be looking at three features of such meetings, as follows: Even though it is very important for the audit committee meetings to be frequent, it is noted that most of the organizations do not meet frequently [ 15 ]. Many committees meet on a monthly basis, while others meet on a quarterly basis or even a semi-annual basis.

According to the American Bar Association codes ofthe minimum number of meetings is twice a year but this number has been increased to four times a year according to the BRC codes of [ 4 ]. In Europe, the codes are silent on this issue; however some European States, such as the United Kingdom and the Czech Republic, recommended that these meetings are to be times per year.

Relationships Among Auditor, Client and External Users

The frequency and duration of these meetings have to be according to the size of the organization and the number and size of issues to be discussed during such meetings. Consequently, while four times a year could be too much for some organizations, twelve times a year could be just sufficient for others. However, what is more important than the frequency of the meetings is the content and results of such meetings [ 16 ].

In addition to the less-frequent meetings held by many audit committees, it is noticeable that not all of the members attend these meetings. However, the attendees should not be limited to the committee members.

relationship among audit client and external users

The audit committees invite CEOs, internal auditors, external auditors, regulatory bodies, finance directors, and relevant others, to attend such meetings, with whom the committee members discuss issues related to the organization. The minutes of the meetings should be noted by a specified person describing the issues that have been discussed, the results the attendees reached to, and the relevant decisions that have been made. Additionally, the audit committee participates fully in determining the fees that would be paid to the external auditors.

Appointing or terminating the head of the internal audit department, or at least issuing relevant recommendations, is also part of the committee activities. The scope of the internal and external audit functions are also determined by the audit committee. However, in this section of the paper, I would focus only on its relationships with internal auditors and external auditors [ 25 ]. Relationships with internal auditors Listing all the tasks of the internal auditors is beyond the scope of this paper.

relationship among audit client and external users

However, I would refer to the tasks that are directly related to the audit committee activities as follows: The relationship between the audit committee and the internal auditors is important for both parties to fulfill their job commitments [ 26 ].

Obligingness of audits of the punishment for not contracted and done audit be included of inancial statements of listed business entities is logical because in beneits for business company? The potential benefits of external audit of financial statements 2. Audit success, measured by the ratio of costs and beneits, the real reasons for conducting the audit. Typically, this is a situation when the same person is paid by the audit taxpayer. In this case that per- of external audit: For inancial statements of the audit client - an example of this example, within the scope of the audit there is not an assessment of statement may be: For example, point out the signiicant risk which even in the case of mi- they should know that the independent auditor report is not the only nor disturbances in business performance will not be able written report which they obtain from the auditor.

relationship among audit client and external users

Furthermore, to meet its obligations to creditors. Non-calculation of these provisions will result he audit process, according to the paragraph ISA Communicating Deiciencies in Internal Control to requires discussion between the audit irm and management of hose Charged with Governance and Management - Auditors audit taxpayers, which may involve discussion about: Hence, if initiative in the cost of materials is neither determined nor analyzed for discussion about these topics lacks, it should be initiated by comparing to the norm-making materials, which can lead to employees in audit taxpayer.

Types of services - Audits - Tax services: CPA firms prepare corporate and individual tax returns for both audit and non-audit clients.

Many small companies with limited accounting staff rely on CPA firms to prepare their financial statements.

relationship among audit client and external users

Seniors are responsible for the field work and supervise the staff. Managers help plan the audit, manage the audit, review the audit work and work with the client to resolve any issues identified. Partners review all audit areas and makes significant decisions. The partner signs the audit report. Owner of the firm 26 Relationships Among Auditors, Client, and External Users Auditor Client External Users Client or audit committee hires auditor Auditor issues report relied upon by users to reduce information risk Provides capital Client provides financial statements to users 27 Auditing Demands Logic, Reasoning, and Resourcefulness An auditor needs to understand more than just the accounting concepts and techniques.

Being a good auditor sometimes requires imagination and innovation. In fact, it is the auditor's opinion which helps in the determination of the true and fair view of the financial position and operating results of a business entity. However, the auditor opinion is neither an assurance as to the future viability of the business entity nor the efficiency or effectiveness with which management operates.

Auditing Professional Standards

Depend on the explanation and information given by others responsible officers of the business entity. Occurrence of conflicts due to the difference of opinion with the client. Thus, the auditor resorts to personal judgment.

Relationship between the auditor, client, and external users

Corrupt practices by client management to influence auditor to give a favorable audit opinion in the audit report of the firm performance. The auditor can't give assurance of the future profitability of the client firm. Detailed checking of the business transactions is not possible for the auditor to make.

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A sample check is only required. However, the auditor while conducting the audit is required to consider the risk of material misstatements in the financial statements resulting from fraud or error.

However, the auditor is not held responsible for the prevention of fraud and error. In an audit, the auditor does not guarantee that material misstatements, whether from fraud or error, will be detected. They may be partners or shareholders.

relationship among audit client and external users

It is a moral check on the employees for not committing defalcations or embezzlement. The audited financial statements are helpful for entities when filing for taxes, applying for bank loans, purchases… 38 Advantages of an Independent Audit Audited financial information is used in settling trade disputes or damage of entity property.