Question

Question 1
You are an auditor at AMA KIPPA Auditors (‘AK’) and part of the audit team of JUNGLE
FEVER (Pty) Ltd (‘JF’). AK has 5 partners and 45 professional staff members, and its offices are
located in Sunnyside, Soweto Market Windhoek. AK was appointed as auditor of JF in JULY
2019. Management has requested that the audit for the financial year ended 30 DECEMBER
2019 be completed as soon as possible after the year end, as the company’s bankers urgently
require the financial statements in order to assess an application for finance received from JF.
Required:
1.1 Expressed simply, what is the difference between the auditing and accounting? (5marks)
1.2 What are the key attributes of an auditor? And provide the relevant objectives of the
\auditors?
1.3 Describe the different types of auditors with relevant examples?
1.4 Identify the different bodies of the audit profession and explain their roles?

Answer 1

1.1

Difference Between Accounting & Auditing
The major purposes of accounting are to determine the profitability position, the financial position as well as the cash flow position of a company.	The purpose of auditing is to check whether the financial statements give a true and fair view.
Accounting begins when a financial transaction takes place.Accounting is an activity that never ends and is a continuous activity	auditing begins generally when the accountants have finished their work.
Accounting is a very detailed financial task.	Auditing, on the other hand, uses samples of financial information to reach a professional opinion.
Accountants deal only with the most current information. They tackle day to day issues and are in charge of making sure financial tasks such as paying bills are done in an orderly fashion.	Auditors use past accounting transactions and classifications. They are there to ensure the information is free from material misstatements. They also look at the internal controls of a company.

1.2

Key Attributes of Auditors

Strong communication skills. The KPMG/Forbes Insights report “Audit 2025” surveyed 200 respondents, including audit committee chairs, CFOs and controllers. Collectively, they named communication as one of the top skills they seek in an auditor. In fact, it’s core to an attribute that clients value most: the ability to articulate a clear point of view on the issues (picked by 62% of respondents, compared with 46% just two years previous). In fact, communication skills (66%) were ranked virtually as important as technology skills (67%), making it one of the two top-ranked qualities auditors of the future must possess.

Emotional intelligence. Just because auditors approach their work with a level head doesn’t mean their clients are in the same place. Whether they’re frustrated over disorganized financial records or anxious about uncovering a potential fraud, clients need the steady hand of an auditor who excels at keeping composure and making sure the bull’s eye—an accurate, exhaustive audit—remains squarely in sight.

Critical thinking and business acumen. This equates to objective analysis and evaluation of the information and facts contained in an audit that can produce actionable insights—or in many cases, the questions that inspire them.

Professional skepticism. In its 2018 document “Enhancing Audit Quality and Transparency,” KPMG delineates the role skeptical thinking plays in the design and execution of an audit engagement: “KPMG’s judgment framework addresses how to recognize and overcome biases in making judgment and applying appropriate professional skepticism.”

Interpersonal skills. For all the technical acumen, compliance knowledge and numerical exactitude auditing demands, at its core, it is also very much a business of people—of dealing with all types of clients in all types of situations. For the successful auditor, exceptional people skills are a must. Empathy, for example, allows an auditor to better understand the client’s perspective as the audit operation progresses.

Objective of Auditors:-

.1. Verification of accounts and statements.

2. Detection of errors or frauds.

3. Prevention of errors or frauds.

1.3 Types of Auditors are;

1. Independent/External Auditors: Professional Audit services providers.
2. Internal Auditors: Company’s own in-house expert auditors to maintain internal control and audit the company’s internal activities.
3. Government Auditors: Auditors that are working with various government agencies; where why audit internal agency audit and/or audit the corporations by court order or government law.
4. Forensic Auditors: They are hired to play Sherlock. Auditors that specialize in crimes and are used by law enforcement organizations.