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Unit
6: Auditor Independence and influence.
Auditor
Independence:
The
auditor and the audit firm should be free from any type of influence like,
personal, external and organization while doing audit work.
Entities
affected by the standard:
1. Federal,
state local government.
2. Hospital,
college.
3. Schools
Why
Auditor Independence is Importance:
- Auditor should not provide the non-audit services that involve management decision.
- Auditor should not maintain client books of accounts.
- Auditor should not part of company board committee.
- Audit organization should not audit their own work.
- The audit organization can be providing non audit documentations.
- Auditor cannot maintain entity basic accounting records.
- Auditor should prepare draft financial and management should acknowledge the auditor role in preparing financial.
- If auditor converts organization method from cash to accrual the same should be acknowledge.
- External impairment of auditor influence by employee or management.
- Unreasonable time should be reasonable for auditor.
- Auditor continues employment effect the independent.
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