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What color pen should used by an external auditor in a company while auditing?
red
What is meant by an auditing independent mental attitude?
In auditing, keeping a independent mental attitude involves "professional skepticism". While an auditor should not assume that everything management says is a lie, he also shouldn't assume that everthing management tells him can be relied upon as true without any need for independent verification by the auditor. An auditor often deals with management, but his duty is not to the audited company's management, but rather to the directors, owners and potential future owners of a company, who will rely on the audited financial statements to make decisions about investment in the audited company.
Disadvantages of auditing?
DISADVANTAGES 1. Frauds by management Auditing fails to check planned frauds. The management can play tricks to manipulate the accounts in order to conceal their inefficiencies. The audited accounts could not show the true view. 2. Wrong certificate Auditing is based on many certificates taken from management and other persons. Auditing may fail to provide the desired results. When certificates provides wrong information. 3. Misleading clarification Auditing fails to disclose correct information. The management may not provide correct clarification. The auditor is bound to present his report even of the clarification is not true. 4. No true picture The auditing does not present true picture. Auditing fails to disclose true picture when figures have been manipulated. 5. No correct view Auditing fails to present correct view. There are limitations of accounting so figures are not facts. These figures are based on opinion. Thus auditing is unable to disclose correct view. 6. No suggestion Auditing is not concerned with the management policies. The auditor cannot guide management for better use of capital. He is unable to suggest what should have been done. 7. Absence of honesty Honesty and independence are highly essential traits. The auditor must certify what is true. The absence of honesty and independence means failure of audit purpose. 8. Bias of auditor The auditing fails to present fair view due to bias of an auditor. It is the quality of an auditor that he should be independent. The bias auditing fails to help many people. 9. High cost The audit work is completed without cost. The cost of audit should not exceed of errors and frauds. Auditing fails to serve million of business entities. 10. Past action Auditing is nothing more than checking of past activities. It is not concerned with present or future. The audit fees increase the cost of business. Such cost does not help to improve market standing of enterprises.
What are some critical matters to be considered when auditing the standard cost of a company?
When auditing the standard cost of a company, it's essential to evaluate the accuracy of cost data, including direct materials, labor, and overhead allocations. Additionally, the auditor should assess the appropriateness of the cost estimation methods and any variances from actual costs, analyzing their reasons and implications. Ensuring compliance with relevant accounting standards and internal controls is also crucial to verify the reliability of cost reporting. Lastly, understanding the impact of market conditions and operational changes on standard costs is vital for a comprehensive audit.
What a good speech for an auditor?
A good speech for an auditor should emphasize the importance of transparency, integrity, and accountability in financial reporting. It should highlight the auditor's role in ensuring compliance with regulations and providing valuable insights that enhance organizational performance. Additionally, the speech could touch on the evolving landscape of auditing, including the impact of technology and data analytics, to illustrate how auditors can adapt and add value in a dynamic business environment. Finally, expressing gratitude for the trust placed in auditors by stakeholders can reinforce the commitment to ethical standards and professional excellence.
What color pen should used by an external auditor in a company while auditing?
red
Why an external auditor should be concerned over internal control?
Good internal controls tell the auditor that the accounting system has the integrity to make him believe that the information he obtains for the reports can be reasonably relied upon to present fairly the results of the company's operations and the balance of assets.
What is meant by an auditing independent mental attitude?
In auditing, keeping a independent mental attitude involves "professional skepticism". While an auditor should not assume that everything management says is a lie, he also shouldn't assume that everthing management tells him can be relied upon as true without any need for independent verification by the auditor. An auditor often deals with management, but his duty is not to the audited company's management, but rather to the directors, owners and potential future owners of a company, who will rely on the audited financial statements to make decisions about investment in the audited company.
What is the role of an internal auditor as it relates to business finance?
An internal auditor is a company employee who independently and objectively evaluates the organization’s operations. The role of an internal auditor is to gather relevant and objective information about the organization. An internal auditor essentially serves as the eyes and ears of the company’s senior leadership and board of directors. Their assigned work may cover any area of an organization; however, their work should be directed by the audit committee. Internal audits have historically been aligned with accounting and financial reporting audits. However, there are other types of audits example, IT auditss, Operation audits and Performance audits.
What is a certified internal auditor?
A certified internal auditor is an internal auditor who has passed a specific test that proves their quality and understanding of the work they do. Internal auditors who want to advance their careers to the next level should consider taking the certification exam to become a certified internal auditor. General Job Description Internal auditors are quality control managers. They can work as staff members for companies or they can be called in on an as-needed basis. Their job is to analyze the productivity and financial organization of a business and report their findings to upper management. A certified internal auditor considers every aspect of an organization’s production and bookkeeping methods and creates a consolidated outline of how the operations are really being handled. They also provide suggestions for areas that could use improvement. Internal auditors are the best defense against poor performance or low quality goods and services. Education and Training Requirements The education required to become an internal auditor depends somewhat on what area of business the auditor intends to work in. Most auditors study economics and finance at a four-year college or university before they go into audit work. This prepares them for the in-depth financial analysis work that they will probably end up doing as a major part of their job. To become a certified internal auditor, you need to successfully pass a specific certification exam. You can find training for the exam through vocational schools and community colleges nationwide. There are also online based programs that will prepare you for the certified internal auditor exam. Typical Salary The salaries for certified internal auditors have been rising sharply in recent years. Individuals who pass the certification exam can expect to earn up to $100,000 annually. That figure can rise depending on the field that the auditor works in. Technology auditing is growing substantially, which is driving up the salaries of certified internal auditors who are proficient in auditing technology based companies. Financial auditors are also enjoying a growing demand. Certified internal auditors who work for large corporations can expect to make as much as $200,000 on average, depending on their experience, certification level, and the type of auditing they perform.
Disadvantages of auditing?
DISADVANTAGES 1. Frauds by management Auditing fails to check planned frauds. The management can play tricks to manipulate the accounts in order to conceal their inefficiencies. The audited accounts could not show the true view. 2. Wrong certificate Auditing is based on many certificates taken from management and other persons. Auditing may fail to provide the desired results. When certificates provides wrong information. 3. Misleading clarification Auditing fails to disclose correct information. The management may not provide correct clarification. The auditor is bound to present his report even of the clarification is not true. 4. No true picture The auditing does not present true picture. Auditing fails to disclose true picture when figures have been manipulated. 5. No correct view Auditing fails to present correct view. There are limitations of accounting so figures are not facts. These figures are based on opinion. Thus auditing is unable to disclose correct view. 6. No suggestion Auditing is not concerned with the management policies. The auditor cannot guide management for better use of capital. He is unable to suggest what should have been done. 7. Absence of honesty Honesty and independence are highly essential traits. The auditor must certify what is true. The absence of honesty and independence means failure of audit purpose. 8. Bias of auditor The auditing fails to present fair view due to bias of an auditor. It is the quality of an auditor that he should be independent. The bias auditing fails to help many people. 9. High cost The audit work is completed without cost. The cost of audit should not exceed of errors and frauds. Auditing fails to serve million of business entities. 10. Past action Auditing is nothing more than checking of past activities. It is not concerned with present or future. The audit fees increase the cost of business. Such cost does not help to improve market standing of enterprises.
What are some critical matters to be considered when auditing the standard cost of a company?
When auditing the standard cost of a company, it's essential to evaluate the accuracy of cost data, including direct materials, labor, and overhead allocations. Additionally, the auditor should assess the appropriateness of the cost estimation methods and any variances from actual costs, analyzing their reasons and implications. Ensuring compliance with relevant accounting standards and internal controls is also crucial to verify the reliability of cost reporting. Lastly, understanding the impact of market conditions and operational changes on standard costs is vital for a comprehensive audit.
What are the qualities an individual should posses in order to be an auditor of a public limited company?
Assuming the individual is already employed by an Audit Firm, has the technical expertise in the company's line of business, has adequate training and supervision, etc..... they should be very attentive to details, very analytical, sharp witted, etc. Auditing is a VERY tedious, boring and complicated job.... it has a very high burnout rate.
List five recommendation that have been made recenlty to strengthen the independent audit function?
A public company auditor, in order to be independent, should not audit its own work (as it would if it provided internal audit outsourcing services, financial information systems design, appraisal or valuation services, actuarial services, or bookkeeping services to an audit client).A public company auditor should not function as part of management or as an employee of the audit client (as it would if it provided human resources services such as recruiting, hiring, and designing compensation packages for the officers, directors, and managers of an audit client).A public company auditor, to be independent, should not act as an advocate of its audit client (as it would if it provided legal and expert services to an audit client in judicial or regulatory proceedings).A public company auditor should not be a promoter of the company's stock or other financial interests (as it would be if it served as a broker-dealer, investment adviser, or investment banker for the company).
What is the process for auditing a class and how can I participate in auditing a class at a university?
Auditing a class at a university involves attending lectures and possibly completing assignments without receiving a grade or credit. The process typically involves obtaining permission from the instructor and registering for the class as an auditor. To participate, you should contact the university's registrar's office or the department offering the class for specific instructions on how to audit a class.
What all should a auditor know?
An auditor should have a strong understanding of accounting principles, auditing standards, and relevant regulations. They must possess analytical skills to assess financial statements and identify discrepancies or risks. Effective communication is crucial for discussing findings with clients and stakeholders. Additionally, auditors should stay updated on industry trends and practices to provide valuable insights.
What are different ways to understand internal control over Inventories?
SAME HERE
