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Very interesting figures and exhibitions regarding the potential liability of the external accountancy firms, particularly the Big 4s, in light of their almost absolute presence in every mayor fraud and financial scandal in the past decade.
Accountants (Big 4s) Professional Liability (audit analytics 2009)Andres Baytelman
Very interesting figures and exhibitions regarding the potential liability of the external accountancy firms, particularly the Big 4s, in light of their almost absolute presence in every mayor fraud and financial scandal in the past decade.
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“..the starting point for enterprises wishing to manage their human capital successfully and seeking a labour competitive advantage is activities of the HR department.”
Client Evaluation and Planning the Audit Lecture slide chapter 8
Describe the steps involved in client acceptance and continuance.
State the purpose and content of an engagement letter.
Explain the steps in planning an audit.
Identify the risks of misstatement through understanding the entity and its environment.
Explain the role of analytical procedures in audit planning.
Describe the requirements to consider the risk of fraud in the audit planning process.
Explain the purpose and function of audit working papers.
Audit company - Audit for companies - PKC Management ConsultingPKCIndia2
An audit company is usually hired to perform the audit process. The auditor will work closely with the company's finance team to review financial statements, internal controls, and other relevant documents. we will provide an overview of how audits work, including the different stages and levels involved in the process. Whether you are a business owner or a professional looking to learn more about auditing practices, this article will serve as a useful guide. In conclusion, PKC Management Consulting is a reputable audit company that offers comprehensive and efficient auditing services for companies of all sizes. With their team of experienced auditors and consultants, they provide valuable insights and recommendations to improve business operations and financial management. Their commitment to integrity, professionalism, and customer satisfaction sets them apart in the industry. If you're looking for an audit partner that can help you achieve your business goals, PKC Management Consulting is the right choice. Contact them today to learn more about their services and how they can add value to your organization.
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This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
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This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
unwillingness to rectify this violation through action requires accountability.
Postsecondary education is a unique opportunity for students to learn and have their ideas and beliefs challenged. However, universities receiving hundreds of millions of federal funds annually have denied
students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
• The Committee on Oversight and Accountability is investigating the sources of funding and other support flowing to groups espousing pro-Hamas propaganda and engaged in antisemitic harassment and intimidation of students. The Committee on Oversight and Accountability is the principal oversight committee of the US House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X.
• The Committee on Ways and Means has been investigating several universities since November 15, 2023, when the Committee held a hearing entitled From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt Universities, and Terror Financing. The Committee followed the hearing with letters to those institutions on January 10, 202
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Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
Biological screening of herbal drugs: Introduction and Need for
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4. Definition: involves general strategy and detail
approach for the expected nature, timing and
extent of an audit
Reasons for Audit Planning
To enable the auditor to obtain sufficient
competent evidence for the circumstances
To help keep audit costs reasonable
To avoid misunderstandings with the client
AUD390 AUDITING DIA
6. Initial Audit Planning:
1. Decides whether to accept a new or
continue serving an existing one
2. Identifies why the client wants or needs an
audit
3. Obtains an understanding with the client
about the terms of the engagement
4. Select the staff for the engagement
AUD390 AUDITING DIA
7. New Client Investigation
Reasons for investigation:
Prospective client’s standing in the business
community
Financial stability
Relations with previous auditor
Procedure to communicate with predecessor
auditor
AUD390 AUDITING DIA
8. The successor auditor should get the prospective
client’s permission to communicate with the
existing predecessor auditor. If the permission is
not given, the successor auditor should decline
the appointment.
The successor auditor should inquire the
predecessor auditor whether there is any
professional reason for the proposed change. If
there are such reasons, the successor auditor
should request the predecessor auditor to
provide him with all necessary details in order to
decide the acceptance of the appointment.
AUD390 AUDITING DIA
9. If the successor auditor does not receive a
reply to his inquiry, he is required to send a
reminder to the predecessor auditor or
communicate with him through other
means.
If no response within a reasonable period
after sending of 2 reminders, the successor
auditor should inform the predecessor
auditor of his attention to accept the
engagement.
AUD390 AUDITING DIA
10. Continuing Clients
Determine reason for not continuing to do the
audit
Is there any previous conflicts over scope of
audit, the type of opinion to issue or audit
fees?
AUD390 AUDITING DIA
11. Statutory requirements
Financial statement audit
Compliance audit
Weaknesses noted in the operations
Operations audit
Audit on Internal Control System
AUD390 AUDITING DIA
12. ISA210 requires that auditors must document
their understanding of an engagement in the
audit files, including the engagement’s
objectives, the responsibility of the auditor &
management, and the engagement’s limitations
Engagement Letter
An agreement between the CA firm and the
client for the conduct of the audit and related
services
AUD390 AUDITING DIA
13. Contents:
Specify job performed by the auditor (audit,
review, compilation, tax return, etc.)
Restriction to be imposed on the auditor’s
work
Deadlines for completing the audit
Assistance to be provided by clients
Schedules of audit to be performed by
auditor
Audit fees
AUD390 AUDITING DIA
14. MIA By-Laws stated
A member should carry out his work with a
proper regard for the technical & professional
standards expected of him as a member and
should not undertake or continue professional
work which he is not himself competent to
perform unless he obtains such advice and
assistance as will enable him competently to
carry out his work
AUD390 AUDITING DIA
16. Factors that increased the importance of
understanding the client’s business & industry:
IT connects client companies with major
customers & suppliers
Clients have expanded operations globally
IT affects internal client process, improving
the quality & timeliness of accounting
information
The increased importance of human capital &
other intangible assets has increased
accounting complexity and the importance of
management judgments and estimates
AUD390 AUDITING DIA
17. › Auditors need to understand client’s business
& industry to provide additional value-added
services to clients
Tools to understand the client's business &
industry: Strategic Systems Approach
1.Industry & External Environment
2.Business Operations & Processes
3.Management & Governance
4.Objectives & Strategies
5.Measurement & Performance
AUD390 AUDITING DIA
18. Reasons for understanding the client’s business &
industry:
There are risk associated with specific industry
There are inherent risk that are typically
common to all clients in certain industry
Many industries have unique accounting
requirement that the auditor must understand
before start to audit
AUD390 AUDITING DIA
19. Factors to understand:
Sources of revenues
Key customers & suppliers
Sources of financing
Information about related parties that may
indicate areas of increased client business risk
According to FRS 124, require to disclose
transactions with related parties in the
financial statements if they are materials
AUD390 AUDITING DIA
20. Related party: “Parties are considered to be
related if one party has the ability to control
the other party or exercise significant
influence over the other party in making
financial decisions”
A Related transaction: any transaction
between the client and related party
E.g. sales or purchase transactions between a
parents company & its subsidiary, exchanges
of equipment between 2 companies owned by
the same person
AUD390 AUDITING DIA
21. Areas that require auditor to understand
Management’s philosophy & operating style
Memorandum & Article of Association
Minutes of Meeting
Ability to identify & respond to risk
Significant impact the risk of material
misstatement in the financial statements
E.g. significant annual increase in sales and
earnings reported by the company was
ultimately determined to be based on various
improper accounting technique encouraged by
the CEO
AUD390 AUDITING DIA
22. Auditors should understand client objectives
related to:
Reliability of financial reporting
Effectiveness & efficiency of operations
Compliance with laws and regulations
AUD390 AUDITING DIA
23. Performance measurement systems: the key
performance indicators that management uses to
measure progress towards objectives
E.g. market share & sales per employee, unit
sales growth, unique visitors to a Web site, sales
per square foot for a retailer, ratio analysis,
benchmarking against key competitors
AUD390 AUDITING DIA
25. Audit Risk :
Risk that the auditor gives an inappropriate
opinion when the FS are materially misstated
Risk that the auditor delivers an incorrect audit
opinion – an opinion which states that the
account presents a true & fair view while in
reality they do not
AUD390 AUDITING DIA
26. Known as Acceptable Audit Risk
Measure of how willing the auditor is to accept
that the FS may be materially misstated after
the audit is completed & unqualified audit
opinion has been issued
Factors result in uncertainty in audit
performance
Nature of audit test
Inherent limitations of an audit
Inherent limitations of the effectiveness of
client’s internal control system
AUD390 AUDITING DIA
27. AUD390 AUDITING DIA
INHERENT RISK
Risk that the accounts may contain misstatements
DETECTION RISKCONTROL RISK
Derived from the
characteristics of
the enterprise & of
its components
Risk that internal
controls will not
prevent or detect
material errors
Risk that the
auditor may fail to
detect
misstatements
28. INHERENT RISK (IR)
Risk related to the characteristics of the
business that may cause material FS
Factors used in assessing inherent risks
Nature of client’s business
Integrity of management
Client motivation
Client’s knowledge of accounting standards
Results of previous audit
AUD390 AUDITING DIA
29. Susceptibility of defalcation
Nature of client’s inventory & technological
development
E.g.
External factors such as technological
development might make a particular
product obsolete
IR is high if no internal control system & IR is
low of internal control exist
AUD390 AUDITING DIA
30. CONTROL RISK (CR)
› Risk that the client’s internal control will not
prevent or detect material errors or
misstatements in the account balance
› Control risk exist due to the inherent
limitation of internal control system &
inadequacy of the segregation of duties such
as human error, faulty judgment
› CR high if internal control system is not
effective & CR low if internal controls system
is effective
AUD390 AUDITING DIA
31. DETECTION RISK (DR)
Risk that any remaining material
misstatements after assessing IR & CR will not
be detected by auditor
Risk that the auditor’s substantive procedures
& review FS will not detect material errors
misstatements
DR high if the auditors are not competent &
due care & DR low if the auditors are
competent & exercise due care
AUD390 AUDITING DIA
33. Definition: a study of relationship between
elements of financial information expected to
conform to a predictable pattern based on the
auditor’s knowledge of the business relationship
between financial and non financial information
AUD390 AUDITING DIA
Types of data, ratios, etc Comparison with
Financial Data (Account balances,
budgets, etc)
Corresponding period, budget &
forecasts
Non Financial Data (Production,
employment statistics)
Entries in accounting records, other
financial data
Ratios & Percentage Preceding period, budget & forecast,
industry statistics
34. Types of analytical procedures:
1. Compare client data & industry data
2. Compare client data with similar prior-period
data
3. Compare client data client-determined
expected results
4. Compare client data & auditor-determined
expected results
5. Compare client data with expected results,
using non financial data
AUD390 AUDITING DIA
35. Common financial ratios
1. Short-term Debt-Paying Ability
E.g. Cash ratio, quick ratio & current ratio
1. Liquidity Activity Ratios
E.g. Accounts receivable turnover, Days to
collect receivables, Inventory turnover, Days to
sell inventory
1. Ability to meet Long-term Debt Obligations
E.g. Debt to equity, Times interest earned
1. Profitability Ratios
E.g. Earnings per share, Gross profit margin,
Profit margin, Return on assets, Return on
common equity
AUD390 AUDITING DIA
36. AUD390 AUDITING DIA
STAGES PLANNING DETAILED TEST REVIEW FS
TIMING Before the FS are
available
Start after client had
submitted FS with
supporting schedules
Carry out overall review
of FS when most of
audit testing are
completed
PURPOSES 1.To understand the
client’s industry &
business
2.To assess going
concern
3.To indicate possible
misstatement
4.To reduced detailed
tests
1. To ensure
completeness, accuracy
& validity of information
contain in the FS
2.To obtain sufficient
audit evidence by
reducing the work done
through substantive
tests
1.To update auditor’s
knowledge of client’s
business
2.To ensure the FS are
not materially misstated
3.To corroborate
conclusions form during
the audit
SOURCES OF
INFORMATIONS
Interim FS,
Management reports,
Budget & forecasts,
Internal audit report
Annual FS, Accounting &
other records,
Management reports,
Internal audit reports
Drafted audited FS
EXAMPLES Calculate key ratios
for client and
compare against
industry’s ratios
Reasonable test on EPF
contribution account
Gearing ratio
38. MATERIALITY
Definition
A misstatement or omission of financial
information that may influence or affect the
decision made by the user of financial
statements
AUD390 AUDITING DIA
39. Factors effecting preliminary judgment about
materiality
Materiality is a relative rather than an
absolute concept
Bases is needed for evaluating materiality
Qualitative factors will affect materiality
decisions
Expected dissemination (various types of
users) of FS
The level of acceptable audit risk
AUD390 AUDITING DIA
40. Assessment of audit risk & materiality
The assessment of audit risk & materiality is
a matter of the auditor’s professional
judgment
Factors that auditor consider to decide
whether an item is material or not:
Its absolute size
Its nature
Its relative size
AUD390 AUDITING DIA
44. Definition : Intentional misstatement of the FS
Types of fraud:
Misappropriation of assets, often called as
defalcation or employee fraud
E.g. a clerk taking case at the time a sale is
made
Fraudulent financial reporting, often called as
management fraud
E.g. intentional overstatement of sales near
the balance sheet date to increase reported
earnings
AUD390 AUDITING DIA
46. 1. Procedure to obtain an understanding of
internal control
2. Tests of controls
3. Substantive tests of transactions
4. Analytical procedures
5. Tests of detailed of balances
AUD390 AUDITING DIA
47. 1. What are the purposes of an engagement letter?
2. What are the contents of an engagement letter?
3. Preliminary engagement activities are undertaken at the
beginning stage of an audit process. List and explain 3
activities to be performed by external auditor during the
preliminary engagement.
4. State 2 benefits of audit planning.
AUD390 AUDITING DIA