auditor independence
Table of Contents
1.0 Introduction
1.1 Audit
1.2 nature of auditor independence
1.3 principle of auditor independence
2.0 The concept of auditor rotation
3.0 The history and current debates concerning auditor rotation
4.0 Different countries regimen should be considered
5.0 Conclusion
6.0 List of references
7.0 Appendices
1.0 INTRODUCTION
1.1 Audit
Auditing is the analysis of the financial accounts or records, by a qualified accountant, and procedures of a firm or organisation. This is essential in order to gain a fair perspective on the company’s financial statement. With auditing, potential investors and creditors can look at the financial statement to decide whether to inverts in a business or not. Auditing is important as it also protects the public from scams and corrupt business procedures.
The advantage of a Auditing is that it provides assurance to the third parties that the company 's statements are fair, the investment decision of investors are based on this report, helps in detection of frauds, speedy processing of loans to the company , and Professional advice by the auditors.
The disadvantages of audit are It does not take into account the productivity and the skills of the employees of the business, the financial data is never current and does not reveal much about the present financial position of a company, different accountants use different techniques, therefore it would be hard to compare audits between companies who have used different accountants and for smaller companies, hiring an accountant/firm to carry out an audit can be costly.
1.2 Nature of Auditor Independence
The Companies Act 1985 and the ACCA Rules of Professional Conduct provide detailed guidelines to ensure that auditors are not only independent but are also “seen to be independent”. The Companies Act requirements for auditor independence have been developed by successive acts of legislation and cover
1.0 Introduction
1.1 Audit
1.2 nature of auditor independence
1.3 principle of auditor independence
2.0 The concept of auditor rotation
3.0 The history and current debates concerning auditor rotation
4.0 Different countries regimen should be considered
5.0 Conclusion
6.0 List of references
7.0 Appendices
1.0 INTRODUCTION
1.1 Audit
Auditing is the analysis of the financial accounts or records, by a qualified accountant, and procedures of a firm or organisation. This is essential in order to gain a fair perspective on the company’s financial statement. With auditing, potential investors and creditors can look at the financial statement to decide whether to inverts in a business or not. Auditing is important as it also protects the public from scams and corrupt business procedures.
The advantage of a Auditing is that it provides assurance to the third parties that the company 's statements are fair, the investment decision of investors are based on this report, helps in detection of frauds, speedy processing of loans to the company , and Professional advice by the auditors.
The disadvantages of audit are It does not take into account the productivity and the skills of the employees of the business, the financial data is never current and does not reveal much about the present financial position of a company, different accountants use different techniques, therefore it would be hard to compare audits between companies who have used different accountants and for smaller companies, hiring an accountant/firm to carry out an audit can be costly.
1.2 Nature of Auditor Independence
The Companies Act 1985 and the ACCA Rules of Professional Conduct provide detailed guidelines to ensure that auditors are not only independent but are also “seen to be independent”. The Companies Act requirements for auditor independence have been developed by successive acts of legislation and cover
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