Thursday, December 19, 2019

Auditor Responsibility And Its Effects On All Material...

In general, auditor responsibility is to express opinion on whether the financial statements are free of material misstatements and presented truth and fairness in all material respect. Auditor will first understand of the entity and its environment, and continue with the planning and perform risk assessment procedure, and also all necessary audit procedure to obtain sufficient appropriate evidence before concludes the audit opinion. ISA 315 Identifying and assessing the risk of material misstatement through understanding the entity and its environment stated that ‘Obtaining an understanding of the entity and its environment, including the entity’s internal control (referred to hereafter as an ‘understanding of the entity’), is a continuous, dynamic process of gathering, updating and analysing information throughout the audit. The understanding establishes a frame of reference within which the auditor plans the audit and exercises professional judgment throughout the audit.’[1] PCAOB Standard AU319 stated that: â€Å"A sufficient understanding of internal control is to be obtained to plan the audit and to determine the nature, timing and extent of tests to be performed.† [2] A clear understanding of client’s internal control assists auditor to determine which areas are potential of material misstatements and the related audit procedures to be taken. Auditor has to evaluate management assertions, understand the design and flow of internal control, and perform test of control toShow MoreRelatedSummary of Sarbanes-Oxley Act of 20021383 Words   |  6 PagesThe Sarbanes-Oxley Act (SOX) was passed by Congress in 2002 (www.sarbanesoxley. com). 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