Because the audit committee is representing the shareholders, and assist the external auditors to reduce the information asymmetry, as the agent for the shareholders towards management (agency principal). By hiring the audit committee and the external auditor, it will monitor the managements as shareholders agents, in order to minimise or to reduce the risk of management actions that harm shareholders interests. Furthermore, the ASX (ASIC 2015) stated that it is important to be independent, due to
ACCT555 - Week 4 Homework 9-22 (Objectives 9-1, 9-2) The following questions deal with materiality. Choose the best response. a. Which one of the following statements is correct concerning the concept of materiality? (1) Materiality is determined by reference to guidelines established by the AICPA. (2) Materiality depends only on the dollar amount of an item relative to other items in the financial statements. (3) Materiality depends on the nature of an item rather than the dollar amount
for a internal auditor to do their job effectively and efficiently, the executives must be willing to work with the internal auditors through tough issues and be open for change and improvements. Internal auditors must have the full support of the audit committee of the board of directors. Internal Auditors and Management rarely have the same views but must work together for the better of the company. Internal auditors pride themselves in saving their company from losing thousands some times millions
Part II – Rubing Sun Planning phase of the audit a. The auditor found 11 situations after met with Pinnacle’s management team that may affect the assessment of acceptable audit risk. To classify the information based on the three factors: External user’s reliance on financial statements: • Based on the background information, Pinnacle is consider selling the Machine-Tech division in order to focus more on core operations – engine manufacturing. This will affect potential buyers rely heavily on
Internal Audit is an independent, objective, assurance, and consulting activity designed to add value and improve operations. It helps accomplish objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control processes. Internal Audit is organized to examine and evaluate current and proposed processes and controls. The objectives of Internal Audit are to: 1. Promote effective and efficient controls through audits, reviews
the audit is a negative activity. Firstly, we should find out what is audit. Anderson(1977) captured the essence of auditing when he stated: the practice of auditing commenced on the day that one individual assumed stewardship over another property. In reporting on his stewardship, the accuracy and reliability of that information would have been subjected to some sort of critical review. To understand what an audit is ,and how it is conducted in the modern context, we need definition for audit. Auditing
pursue the matter any further. PwC’s conclusion may reasonable and Campbell’s practice may not have a material effect on Campbell’s operating results, but it still causes a misrepresenting report. An auditor should express a explanation on the audit opinion. Guaranteed Sales Although this practice was not fraudulent, the plaintiffs insisted that Campbell had a responsibility to record a reserve or allowance in anticipation of substantial customer returns likely to result from theses “sales.”
1. Role of Internal Audit 1 2. Introduction and Purpose of this Strategy 1 3. Acknowledgements 1 4. Audit Approach 2 5. Audit Working Procedures and Practices 3 The Audit Toolbox 3 Audit Reporting 5 6. Internal Audit Assistance in UWCN Risk Management 5 7. Fee-Earning Work 5 8. Links To Institute of Internal Auditors (IIA) and Other Bodies 6 9. Staffing 6 10. Operational Plan 2001/02 7 11. Strategic Plan 2002/05 10 12. Annex A Key Risks 21 13. Annex B - Audit Universe 29 14. Annex
Roles of audit committee An Audit Committee does not focus solely on internal audit activities or on financial issues. Recent trends are for it to take on broader roles and responsibilities. The establishment of an Audit Committee affords the opportunity to set aside time to focus on governance, risk and control issues. The key responsibilities of an Audit Committee include: overseeing the risk management framework and processes; reviewing compliance related matters and internal controls;
An Introduction to the Audit Committee An audit committee is a subcommittee of the board of directors that oversees the financial reporting process of a company including its audit procedures. In general, the audit committee’s responsibilities are to monitor the financial reporting process, oversee the internal control systems and to oversee the internal audit and independent public accounting function (Doupnik & Perera, 2012). Another requirement for publicly traded companies in the United States