Independence of auditing in all engagement activities Essay

Independence of auditing in all engagement activities - Essay Example The factors that influence an auditor to present an unwarranted unqualified opinion includes threats or intimidations as well as the external auditor's self -interest. The auditor's sole responsibility is to issue an opinion on the fairness of the financial statement assertions. Without exception, all external auditors should not allow their independence to be affected by his or her own interests. International Auditing Standards requires that all external auditors should only continue on an audit engagement if they feel that their self interests affects their independence. Independence mean not only independence in fact but also go hand in hand with independence through appearance. The auditing Standards on independence rule requires that the external auditor must not have any material self interest in the clients. An auditor has self interest if the auditor, the auditor's spouse and children are owners of shares of stocks in the audit client's business. The Companies Act of 1948 is the legal framework for external auditors to follow in terms of independence (Power 1997, 17). Clearly, many auditors will not allow their independence to be affected by self -interests . In addition, all external auditors must not allow their independence to be influenced by self - review. The auditor is must consider if self -review will affect his independence in the performance of his or her audit programs. An auditor who is a relative of the audit client is definitely not independent. An auditor that has a loan arrangement with the audit client that is material in nature is not independent of the audit client. Clearly, it is mandatory that all external auditors will not allow their independence to be affected by self - review. Further, all external auditors must not permit their independence to be influenced by advocacy. The auditor's membership in an organization that he is auditing is definitely not being independent in terms of auditing a client. The Code of Ethics for external auditors requires that the external auditor must not be a current membership in an organization if he or she intends to audit such organisation. Any sign that creates a climate of doubt as the external auditors not complying with the auditing standard of being independent both in fact and in appearance should cause the external auditor to give up the client immediately. Definitely, all external auditors should not allow their independence to be affected by advocacy.Furthermore, all external auditors must not permit their independence to be affected by familiarity. It is normal that many external auditors use lesser time to finish their audit assignments for many of their former audit clients. The repeat auditors will just focus t heir repeat audit on items that are interent risks like cash and small inventories. Also, a repeat auditor knows that company has a strong or weak internal control. Thus, internal control verification time is lessened. One advantage for repeat auditors is that these external auditors already know a lot of the company's basic financial ins and outs in terms of presentation of the balance sheet, income statement and statement of cash flows. However, the auditor must still scan and do test audits on low value and less audit risk accounts like buildings and factory machines. The external auditor must complete each repeat audit engagement with a prior client as if, it was a new audit. The only difference with the repeat

Analyzing Jobs at Custom Carpet Cleaning Essay Example | Topics and Well Written Essays - 750 words

Analyzing Jobs at Custom Carpet Cleaning - Essay Example The four aspects that the Job analysis should cover are: a) what job the employee does. b) The process followed by the employee to accomplish the task. c) The area of operation handled by the employee. d) The qualification of the employee, which involves the skills, knowledge and abilities requisite (Franklin, p.2). In the case given the approach applied by Bob to conduct a Job analysis is very pragmatic yet not very complete. Bob has decided to conduct a survey in all the outlets of the Custom Carpet Cleaning to get clarity regarding the jobs carried out by all the outlets. Bob is conducting this survey to understand the reason behind the discrepancies in the salary structure amongst the different outlets of the company. The company has two kind of services one specifically for the residential clients and the other specifically for industrial clients. The survey conducted by Bob will have one respondent from each outlet. This will help Bob to understand the variation in the tasks carried out in different outlets. This survey will give Bob a schematic overview regarding the difference in the operations carried out by the various outlets. Bob will understand the difference in the approach, skills and responsibility of all the employees posted for the same post but at different outlets. The posts available at various outlets require employees with different set of skills and approach. The machinery used and the methodology applied by the employees to complete their task also depends on the kind of job assigned to them. A job analysis will let Bob segregate the jobs which though have similar designation yet vary in the terms of the responsibility carried out by the employees. Bob will be able to sketch out the different job descriptions depending on the specific requirements. He will be able to allocate the salary structure depending on the job description and skills required. However the method applied by Bob is not complete as he will be surveying only one employee from each outlet. Within the same outlet the approach and the responsibilities may differ and Bob should consider surveying a larger sample from each outlet. 2. What can be done to improve this job analysis process? Ans 2. The method applied by Bob to conduct the job analysis can be improved by increasing the num ber of respondents surveyed by Bob. Bob must first utilize the online research done by him and divide the various jobs carried out by the employees. From each outlet at least 10% of the employees should be selected as respondents for the purpose of the survey. Bob should also select the employees who are being given more than the usual salary slab. The employees who are being given less than usual pay should also be included in the survey. To make the survey more accurate the supervisors should also be handed out a questionnaire. The questionnaire given to all the supervisors should have questions regarding the various job profiles in their respective branches. The supervisors should be asked to fill information regarding the various job profiles in their outlet along with the skills and knowledge required for each profile. The questionnaire formulated for the supervisors should also have questions regarding the various techniques applied in the various job profiles. By including mo re employees and supervisors in the survey Bob will be able to get a more accurate picture regarding the different job profiles present in different outlets. Since the purpose of Bob’