follow them because of our obedience towards authority figures. We tend to follow the rules of our authority because they generally know what is best for us and know what the right thing to do is. However‚ there may be times in which our authority figure is telling us to do something that either feels wrong or we know is the wrong decision or action to make. In this case‚ it sometimes makes individuals wonder whether to go against their beliefs and opinions to obey the authority or if they should choose
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largest public accounting firms in Norway provided misstatement data from 58 audits. The results show that inherent risk factors related to personnel issues are related to the incidence of misstatements at the financial statement level. These factors plus factors related to management integrity and prior period accounting adjustments are related to the magnitude of the misstatements. Inherent risk assessments at the account level had a marginally significant relationship with both the incidence and
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Inherent Risk * i/3 of audit risk model.. lesast amount of evidence awailable use professional judgement * not static‚ assessed at the planning stage mostly and audit too Major factors that an auditor should consider when assessing inherent risk 1) Nature of clients business – the more susceptible the client the greater the risk ( if the client is in a business with heavy changes in technology 2) Nature of data processing – the more poorly the IT system is made
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Inherent risk Computerizing risk Non-routine transactions (Beasley 2010‚ p268) ‘Transactions that are unusual for the client are more likely than routine transactions to be incorrectly recorded‚ because of the client often lacks experience in recording them.’ Why it is risk: Santos use a series of computerizing or IT technology to support their business for increase market competition. IT technology has been used for trade ordering systems between customs and Santos. Customers can order
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Milgram‚ S. (1974) Obedience to Authority. Predictions and variations conclusion. Summary of Milgram’s study detailing the average levels of shock ‘teachers’ administered and the percentage of ‘teachers’ administering the maximum voltage with results reported by prediction and type of authority variation. The data shows during the experimental conditions the highest average voltage that ‘teachers’ stopped administering shocks was in the original study (368 Volts) with the highest percentage of
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Authority Authority‚ power and legitimacy are perceived as fundamental elements of contemporary society for the sole reason that these are the defining features of a culture with political and social organisations and hierarchies. The term ‘authority’ is commonly misused by academics as a synonym for ‘power’ or ‘legitimacy’ which has led to confusion regarding the entire concept of authority. Authority is generally defined as a person (or group of people) who has the power or right to give orders
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Inherent Risk Inherent risk is the susceptibility of an account balance or class of transactions to misstatement that could be material either individually or when aggregated with misstatement in other balances or classes assuming that there were no related internal controls. This risk mainly arises at the level of management and the risk factor generally being high. Factors Affecting Inherent Risk: At the level of financial statement Integrity of management; Management’s experience and
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The Theory Of Obedience The purpose of this essay is to describe and evaluate Milgram ’s theory on obedience. The essay will outline the theory‚ the famous experiment‚ the findings from the experiment‚ and the subsequent studies that have strengthened and weakened the plausibility of the theory. What is the Theory Of Obedience? Milgram (1974) stated: ’A substantial proportion of people do what they are told to do‚ irrespective of the content of the act and without limitations of conscience
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Conformity and Obedience Starting from a very young age‚ it is considered the norm to obey and to conform. The purpose of this essay is to evaluate a study for conformity and obedience. Conformity can be defined as a change in one self‚ when one gives in to group pressure‚ in order to fit in to society. Obedience on the other hand is when you are told what to do. The difference between the two are‚ when we conform it is usually down to peer pressure. Where as in obedience you are taking orders from
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ASSESSING OBEDIENCE Obedience is a characteristic ingrained in every person. No matter who a person is‚ there is always a more authoritative figure that they must obey to. Stanley Milgram‚ a psychologist at Yale University‚ conducted experiments that tested obedience towards authority. These experiments were conducted in 1963 at Yale University. The experiments Milgram performed gained many different reactions from people. Two authors that wrote their thoughts on the experiments done by Milgram
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