Audit and Assurance azeem - Azeem Mohammad 06128671 Audit...

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Azeem Mohammad 06128671 Audit and Assurance The following report will explain and critically discuss the issue of auditor independence with regard to the provision of other services. There are two kinds of auditing, that is internal and external (independent) auditing. Internal auditing focuses on the audit of an entity’s operational effectiveness and control. Internal auditors are usually employees of the audited entity. On the other hand, an external or independent audit focuses on the assessment of the fairness of an entity’s financial statements that is expression of an opinion whether an entity’s prepared financial statements present fairly in all material respects in accordance with the financial reporting standards applicable to that entity. External auditors are independent from the audited entity or company. The meaning of Independence “A Certified Public Accountant who provides a company with an accountant's opinion but who is not otherwise affiliated with the company”. The main purpose of an independent audit is the rendering of auditor’s opinion on whether the overall financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework. The independent audit report is then provided to a user such as an individual, a group of persons, a company , a government , or even the general public , among others, as an assurance service in order for the user to make decisions based on the results of the audit. But the auditor’s opinion should be completely supported by evidences and working papers. To support the audit, the auditor must perform procedures to find audit evidence about the amounts and disclosures in the financial statements. He also tests the entity’s internal control and policies that are relevant to the entity’s preparation and fair presentation of financial statements. In the manner of these procedures, the auditor accumulates findings and comments on the entity’s accounting and internal control system. By analyzing these findings, the auditor formulates appropriate
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This note was uploaded on 10/24/2010 for the course ACCOUNTING INFS2005 taught by Professor Steven during the Three '10 term at Australian National University.

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Audit and Assurance azeem - Azeem Mohammad 06128671 Audit...

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