Question

In: Accounting

Describe and discuss a reason for audit failure.

Describe and discuss a reason for audit failure.

Solutions

Expert Solution

Audit failure means conducting an audit which doesn't pretend the true and fair view of financial statements which are free from material misstatements arising due to frauds or errors.

This means the auditor risk towards financial statements is material and the audit report may not be apt for the given period.

Reasons for audit failure::

1. Improper planning by audit team

2. No knowledge of business

3. Improper communication between the management and the auditor.

4 in competency of the auditor ie not updated with relevant legal requirements and regulations.

5. Human error

6. Negligence by auditor and lack of professional skepticism

7.miss applying or interpretation of Gaap and IFRS

8. Auditor committing fraud with management by knowingly issuing more favourable audit report than is warranted.

9. The Auditor can be influenced directly or indirectly in the financial interest of the audit client.

10. Factors effecting auditor's independence like personal relationship with clients .

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

1. Compare and explain the business failure, audit failure and audit risk.
  1. Compare and explain the business failure, audit failure and audit risk. 2. List and explain the 4 major sources of auditor's legal liability. 3. Explain what constitutes criminal liability for accountants.
The reason for the market failure The possible or potential effects of the failure on Fourevr’s...
The reason for the market failure The possible or potential effects of the failure on Fourevr’s operations (whether positive or negative) The role of government regulations/policy to correct each failure, and what effects those regulations might have on the company’s costs, revenues, and profits How can market failures affect software development?
The reason for the market failure The possible or potential effects of the failure on Fourevr’s...
The reason for the market failure The possible or potential effects of the failure on Fourevr’s operations (whether positive or negative) The role of government regulations/policy to correct each failure, and what effects those regulations might have on the company’s costs, revenues, and profits How can market failures affect an Oil and gas exploration and production?
Discuss the key reason for the market failure in Sierra Leone in year 1980              2.    According to...
Discuss the key reason for the market failure in Sierra Leone in year 1980              2.    According to McMillan (2002), discuss how the economy can maintain good market     3.    As per the article discuss the consequences on corruption on Sierra Leone during 2017-18                                                                                                                                            4.    According to Cunningham (2011: 28-29), there are serious consequences for market failure by a nation, and particularly in a small and endowed country like Sierra Leone. Discuss 5 of those sconsequences that can arise due to market failure.                                         ...
As mechanical engineering explain the reason why an early airbag was a failure, and the reason...
As mechanical engineering explain the reason why an early airbag was a failure, and the reason any system acquisition processes that were not followed that may have contributed to the failure.
Explain the reason for the failure of the Titanic in terms of Materials Science.
Explain the reason for the failure of the Titanic in terms of Materials Science.
The auditor is sued for audit failure. If it is discovered that the auditor was not...
The auditor is sued for audit failure. If it is discovered that the auditor was not independent and that the auditor knew about their lack of independence, what would be their most likely defense? Describe why Please completely answer in 1-2 paragraphs.
What are some of the contributing factors of the failure of the audit in halliburton in...
What are some of the contributing factors of the failure of the audit in halliburton in 2005? and also, did they have audit or accounting failures and if so, please give examples. thank you
Search 3 Case of ERP projects failure for each of these reason a. Unclear needs or...
Search 3 Case of ERP projects failure for each of these reason a. Unclear needs or wrong software b. Lack of user involvement or lack of support from the company leader c. Choose the wrong consultant (vendor) implementation
What would be the metabolic effects of liver failure? Describe in detail. Discuss the pathways which...
What would be the metabolic effects of liver failure? Describe in detail. Discuss the pathways which will be affected and the effects on other organs of the body. Remember the many functions of the liver. (15) Identify the many functions and pathways in the liver which will now be deficient. Both central metabolism and those of consequence to other tissues (5 pts). (type answer here) Identify materials/chemicals used by other organs/tissues which would be deficient, effects on the pathways of...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT