Audit Assurance and Compliance Financial Auditing Standards

Question: Discuss about theAudit Assurance and Compliance for Financial Auditing Standards. Answer: Introduction Auditing is the concept that takes place in every organization either during every financial year or during the sudden visits of the officials. Any big company is required managing financially which is an important aspect. This is carried out to make their data secured by providing safety with no data loss of the information that is related to the company. In this study it tells about the work executed by the auditors (Carmichael, 1974). They are proposed with some work to which calculation of the statements that regards to the data relating financial decisions should be made by the management. Only the examiners who is found responsible is given the authority of auditing the files and takes the step forward of representing the entire customized information to the stakeholders with all leadership validation and finding out the malfunctions that are carried out by manipulations with professionalism and making the appropriate estimations of the financial requirements for the company an d detailing them with that. The two elements such as morality and competence obligations are to be followed by the organization and should present the entire company related information in front of auditors (Debreceny et al, 2005). The management should take responsibility and prior step to implement the suggestions that are specified by auditor for the sake of company. The clarity in the data should be maintained regarding the data information of the company with perfection, with which the auditors can notice on all aspects with a clear view by maintaining good standards and accuracy. Any doubt related to the financial data are enquired by the officers and cleared then and there to perform correct audition. The significant variants of the financial statements are taken into consideration such as company revenue, assets profiting the company and the capital of all divisions related to that financial year and by viewing and checking them perfectly the task of auditing the files is sa id to be completed (Cegielski, 2008). Following Steps are to be Noted and Applied to BSF Ltd The examiners before getting into the acceptance of auditing the financial statements of any company should keep in mind that they are supposed to be compliant to all laws without being impotent by getting threatened by any organizations or a group and should follow the ethical rule conducts. These are taken from the lines of the book called ethical guidelines. The important point to be noted by any auditor is that any auditing task that is leading to threats should not be accepted by the auditors (Holstrum Hunton, 1998). Make sure of the guidelines that are mentioned in the book of ethical guidelines before performing the task of auditing in any company and the factors responsible for it. The auditor foremost thing to be done is to collect all the necessary and important information relating to the business such as clients information and the records of data for the work that is to be done and later they need to gist out the glimpses of work and the problems that are found if any s o that it does not end up with any mess as it is the client related work (Aall, 1999). The factors such as insecurity and threatening can be the reasons for cancelling the task given by the client. For the assessment of audit files there is no particular time frame designed it can be carried out as long as it requires until the task that is accepted is carefully looked after. This in turn benefits in knowing the information of clients in detail. The auditor has some objectives with which he wont get compromised and accomplish all the formalities that are related to auditing after the client gets an approval sign from examiner to audit their files (Chan Vasarhelyi, 2011). Any new firm can be the reason for the occurrence of threats to the auditors which is the function of job and this happens if any auditor of the team included in the share of the organization for which the task is undertaken. If the auditing team is expected to be under any threat then there is no compulsion of cancelling the audit they can even carry on with their work by taking proper security actio n which safeguards them from the clients. As these kinds of threats are faced repeatedly so appropriate safety measures are to be taken to get of the issue completely and destroy them with no chance of occurrence in future again. If any other issues are aroused from the clients in the next level of audits they are verified by identification and then accepted (Chan Vasarhelyi, 2011). The audit team should be safeguarded with the exact solutions with no issues of threat from the clients. The organization that is chosen defines the efficiency of the auditor. The auditing team differs if big organizations are in the catch. The special efficiency skills are expected from the auditor for the high profile industries such as BSF and his ability to understand with the terms of rules and policies of that industry for this criterion. If auditor is ready to accept the task then he is expected with a higher evaluation results and if such extent is not shown then it is the way of risking themsel ves with the threat if they cant find their ability for the task to execute and acceptance is given if not able to figure out the details of the business to the required level (Holt Henson, 2000). The satisfaction of clients is expressed if their expectations are met like auditing the files before the deadline is met for which the auditor should pay attention and all requirements are to be fulfilled before signing off the task. Auditing at BSF Ltd is Done Under these Conditions If accurate solution is not given that is relevant to the situation mentioned then its the opportunity of inviting the threats that is related to the audit firms while benefitting the financial statements by providing the conditions that are suitable for them. The types of risks that are involved in the auditing are as follows: Control risk of audit Inherent risk of audit Detection risk of audit Inherent risks are said to be that by any possibility the information loss occurs and involved in the shares of company or evaluating the data in an inappropriate manner in the financial statements. The consequences of the controls are different from this and it is very important to note that it should be verified. The inherent risk is to be faced by the company certainly if the level of risk if found at higher level (Teck-Heang Ali, 2008). The similar one is noticed in BSF limited. The BSF limited standards are different in comparison to other industries which rely on the judgments of their own as it is personal and gives the opinions with no limitations. These are the set rules for moving forward. This shows that the inherent risk is at higher level. The control risk is very less and insignificant that is recognized with BSF limited. The involvement of such risk is less than 5 percent. If the process controlling mechanism is not correctly handled then it gives a way to the risk of control whose definition can be given exactly from this. Then definitely threats are invited if unable to identify the financial statements that are opportunistic (Teck-Heang Ali, 2008). Internally, measures to control that are suitable are to be identified for solving the delusion relating to BSF.BSF control measures are to be seen by the auditor and comment accordingly as is being used in industry. The efficiency of them is found to be good at BSF with the implementation of such control measures (Flesher, Previts Samson, 2005). BSF being the industry of top position can expect with such a rate of risk factors and the information about the business firms is not properly submitted to the auditing team. So the control measures are given the chance of figuring and locating the situation for controlling it (Flesher, Previts Samson, 2005). The detection risk is seen in the picture when the statements of financial bills are missing from the company and they are unable to locate it. It seems to be that auditor is in favor of the company and his inability is highlighted. The financial statements are to be audited with the set of customized flow chart and in a systematic way so that it is easy to locate the data that is missing and to spot the manipulations done in the financial statements and the necessary modifications are to be suggested since the finally recorded data is expected to be correct with the perfect data analysis by the auditor (Elliott Pallais, 1997). At later stages it might create wrong impression in the users mind if found any in corrected data in the files. For reducing the chances of risk factors multiple opportunities are given to the auditors to carry out the analysis. The audit team finally represents the combination of three audit risks only after completing the entire process of auditing the files. The risks that are involved in the three kinds such as inherent risk, control risk and the detection risk, any increase should be figured out for estimating the risk that complicates the audit (Soh Martinov-Bennie, 2011). The Audit risk = Inherent risk x control risk x detection risk The process had been identified by the audit team to know the threats that are involved in the task of auditing the files and possible ways are to be reported for the reduction of threats they are supposed to be acknowledged with work assigned to team for making the final decision on the reduction of entire threats (nerud, 2007). The task can be rejected if the level of risk is at unmanageable position. Numerous processes of safeguarding tracks has been proposed if the detection risk is at high level but here it is at minor level. Management approval is required for accepting the task because huge labor and long time frame is necessary for this risk to handle. The detection risk level is inversely proportional to the inherent risks and the control risk levels. Audit team proposed that the detection risk would be at the lower stage if inherent risk is noticed in the task which in turn making the possibilities for the inherent risk to the high level peaks. The threatening levels for inherent and detection risks are found to be high by the auditing process team at BSF as the end result (Karapetrovic Willborn, 2000). The audit risk calculations are done in the following manner: The Audit risk = Inherent risk x control risk x detection risk = 0.9 x 0.05 x 0.8 = 0.36 or 36 percent The audit team has a fine line of detecting the threat levels so the level below 10 percent is said be moderate in general. Eventually for the BSF the threat level is noticed to be below 10% so the audit threat is at safer side. So no further issues are found in accepting the task of auditing the financial statements at BSF limited. Program of Audit at BSF Ltd A rule in the auditing process is important that many proofs are to be collected that are related to the audit by the auditing team for the purpose of sticking to the procedure that is systematic and appropriate for auditing the financial statements. After the evaluation processing the accounting system of the client is verified by team then the auditing process is executed for instance in this case it is BSF limited. For the clients task the procedure that is followed is the detailed study of the accounting system by the audit team (Vasarhelyi Halper, 2002). Later on many tests including control test is conducted that is related to the process to ensure that all the evidence is accumulated in the mentioned time period. The evidence of the financial statements of clients is to be provided by the audit team at the end. The certainly recommended audit programs are as shown: Monthly based financial reports Number of accounts to be seen Suggestions from the previous audits to be followed Capital finance at the year-end should be proposed Client reports to be sent and funds lists to be received Account should be checked on prelims for funds Files and ledgers related to the financial assists are to be observed thoroughly At the end the financial income should be matched with the data Office and bank accounts should be linked Transactions should be checked and the amount taken and utilized for the same should be reported CSIRO Grant Treatment The external auditors have to follow entities in the financial statements that pertain to irregularities mentioned in the journal since the auditing process is followed according to it. The funding is distributed by enquiring the entities (Adams Simnett, 2011). Development and the research are the two success factors designed by BSF limited. External factors are responsible for uncertainty in research. If success is gained from such research programs it can used for the beneficial purpose of customers. Proper research and development activities should be done for attaining success and correct targets should be known. Based on the budget and time the in between targets should be cleared. The journal guidelines are followed by BSF for effectiveness. The budget for research is allocated on daily basis as the BSF research process is complicated. More amounts is allocated for materials and equipments. The funds should be yet fixed by audit team based on industry works (Soh Martinov-Bennie, 2011). Triple Bottom Line Addendum The social, environmental and the economic production are the three entities on the triple bottom line. This system is designed by Spreckly during 80s as a part of signature audit process. These standards are followed by BSF limited. The financial statements work credits are appreciable. The good communication and friendly environment is accepted though the auditing process is lengthy. It is being opposed by other firms because of the favor to fish production than to food material suppliers. But it benefitted the next generation (Soh Martinov-Bennie, 2011). The poor and high bias is created. It was accepted as perfect solution as the time went on .this triple bottom line is the measure of success but not appreciated by the auditing team for the signing off as they were unwilling to do so. Are you Willing to Sign-off on that Statement as Being True and Fair? The auditor is forced to sign off the document because of the evidences that are available and the availability of the information is huge proposing that the process of auditing is right. On the conditional basis in the market the information is given only after the extensive research and the conclusions from the situations are drawn. The patent value that is produced by the management is found to produce the output that is efficient in future. Since the technology advancement is low there is less completion in market bur progresses with time (Vasarhelyi Halper, 2002). The research in market might not be same all time it may change. In near future in some time the market might gain a good understanding and huge interest is bought on patent value. The product popularity is taken into account before fixing the price for it and conditions of sales are also given importance. There is no worry expressed from management because it can get its value after popularity is gained in market. References Aall, C., 1999. The manifold history of eco-auditing and the case of municipal eco-auditing in Norway.Corporate Social-Responsibility and Environmental Management,6(4), p.151. Adams, S. and Simnett, R., 2011. 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