Further the report should include a statement on each

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Further, the report should include a statement on each of the following issues: (a) Whether the auditor has obtained all the information and the explanations that are required (b) Whether proper accounting and other records (including registers) have been kept by the company as required by the Act (c) Whether the returns received from branch offices of the company are adequate; and (d) Whether the procedures and methods used by the holding company or a subsidiary in arriving at the amount taken into any consolidation accounts were appropriate to the circumstances of the consolidation.
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Are auditors responsible to detect Frauds, Errors and Irregularities? In general, the auditor does not have a responsibility to plan and conduct the audit with the expectation of detecting frauds, errors and irregularities that have a material effect on the financial report (see ISA 200, 220, 230, 240, 250, 300, 320 and 720). It is the auditor’s duty to investigate and report frauds and irregularities only in circumstances where concerns are raised by evidence, which comes to light in the course of a normal audit designed to provide reasonable assurance that the financial report is free of material misstatement (see ISA 315, 330, 500, 520 and 610).
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Audit Contract between Auditor and Client An engagement letter stipulates the contractual duty of an auditor that arises and it enunciates the extent of an auditor’s duties in addition to the duties prescribed by the Act. A contract made with an auditor (or by any party), more often than not contains both express and implied terms. Terms are implied both by legislation and common law. A standard audit contract always contains two express terms: a detailed description of the work to be done; and a definition of the degree of care and skill that the auditor must bring to the task
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Duties under Common Law and Equity Duties arising from Contract Law - Duty to Exercise Reasonable Care and Skill Implied term of the audit contract An auditor’s duty is only discharged if he can show that he has exercised a reasonable degree of care and skill in the performance of his work An auditor must be honest, and must not certify as true what he does not believe to be true: Lopes LJ explained that “an auditor is under duty to see that he has performed the work he was required to perform ... with the skill, care and caution which a reasonably competent and careful auditor would do” (Re Kingston Cotton Mill Co (No 2) [1896] 2 Ch 279 at 288).
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Common Law and Equity ( cont.) Common Law Duties arising from Tort Law with regards to negligence of the auditors Duty of Care Breach of Duty Remedies Contributory Negligence
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Duty of Care – Law of Tort
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