Audit AnalysisEssay Preview: Audit AnalysisReport this essayGoing public—IFRSChange in accounting standardsUsers—investorsBiases-Borrowing a large amounts of cash, tarnished reputations —going concernMuch of payment not collectedForeign investorsConsulting and auditingRequirement:Continuance decisionIssues (changes in work and audit report)Changes to audit report if issues not resolvedIssue: Internal controlPPl management is having problems dealing with operations and their accounting systems are struggling to keep up. So, the design, implementation and maintenance of internal control are questionable which will threaten to the preparation of the financial statements. In addition, it can be hard for PPl obtaining sufficient and appropriate audit evidence from ABC due to out-of-date accountings systems. Lack of sufficient and appropriate evidence makes auditors hardly draw reasonable conclusions by using professional judgment. The audit risk in this case is relatively high.
Audit AnalysisEssay Preview: Audit AnalysisReport this essayGoing public—IFRSChange in accounting standardsUsers—investorsBiases-Borrowing a large amounts of cash, tarnished reputations ―going concernMuch of payment not collectedForeign investorsConsulting and auditingRequirement:Continuance decisionIssues (changes in work and audit report)Changes to audit report if issues not resolvedIssue: Internal controlPPl management is having problems dealing with operations and the accounting systems are struggling to keep up. So, the design, implementation and maintenance of internal control is questionable which will threaten to the preparation of the financial statements. In addition, it can be hard for PPl gaining sufficient and appropriate audit evidence from ABC due to out-of-date accountings systems. Lack of sufficient and appropriate evidence makes auditors hardly draw reasonable conclusions by using professional judgment. The audit risk in this case is relatively high.
Audit AnalysisEssay Preview: Audit AnalysisReport this essayGoing public—IFRSChange in accounting standardsUsers–investorsBiases-Borrowing a large amount of cash, tarnished reputations ⁺going concernMuch of payment not collectedForeign investorsReports, or the management team working together, have decided that this is not the right call. What it calls is a misperception of accounting, but not understanding the issues at stake. This leads to excessive risks and costs that the auditor’s office takes a hard look at and tries hard to resolve. We think we need to learn about accountability for this type of performance management, and take action to identify issues that are out of control, and get them fixed. The next step is to establish the appropriate management standards.
Audit AnalysisEssay Preview: Audit AnalysisReport this essayGoing public—IFRSChange in accounting standardsUsers—investorsBiases-Borrowing a large amount of cash, tarnished reputations ⁻going concernAlmost all accounting professionals are under pressure to maintain the status quo of their organizations, so they need the tools and management to make sure their work is done correctly. The cost to the system is astronomical. The cost per hour of a day to monitor and manage this type of business is $20-$35 per day. In any case, accounting professionals are not going to provide sufficient professional advice and technical assistance to all members of their financial team. All employees must be highly compensated for their work and in line towards the highest possible standards. Therefore, it should be the auditors and management for this type of work who make the decision to do this. Management should understand the factors of the management and know just this, and not waste their time worrying about performance concerns. In other words, they should be motivated to be accountable by these issues.
Audit AnalysisEssay Preview: Audit AnalysisReport this essayGoing public—IFRSChange in accounting standardsUsers—investorsBiases-Borrowing a large amount of cash, tarnished reputations ⁼going concernAlmost all accounting professionals are under pressure to maintain the status quo of their organizations, so they need the tools and management to make sure their work is done correctly. The cost to the system is astronomical. The cost per hour of a day to monitor and manage this type of business is $20-$35 per day. In any case, accounting professionals are not going to provide sufficient professional advice and technical assistance to all members of their financial team. All employees must be highly compensated for their work and in line towards the highest possible standards. Therefore, it should be the auditors and management for this type of work who make the decision to do this. Management should understand the factors of the management and know just this, and not waste their time worrying about performance concerns. In other words, they should be motivated to be accountable by these
This is a material misstatement, a scope deficiency and it is pervasive as accounting system and internal control will affect all the accounts with in the PPl. If PPl cannot improve the operation and accounting system and provide sufficient and appropriate accounting evidence, the audit report should show a modification paragraph and disclaim the opinion.Issue: IndependenceThe growth of ABC largely due to the growth of several clients including PPl and the billing to PPl have more that tripled in the last year while much of the billings remain uncollected at this point. So, if ABC takes this engagement, ABC need to ensure that ABC itself and members of ABC remain free of any influence, relationship or interest which would impairs the professional judgement or which, in the view of a reasonable observer, would impair the professional judgmentIssue: Continuous engagementIn CAS 220, Information relevant to decision about continuance of client relationships and audit engagements are:Integrity of clientsPPl has a great need of cash because of its rapid growth. So, PPl borrowed a large amount cash from an investor who has tarnished reputations instead of investors who have good reputations. There is a risk that PPl or managers in PPl involved in unethical or even illegal activities.Competency of engagement teamSince ABC has already done a variety challenging professional work for PPl, the auditors in ABC should be competent in auditing PPl.