The collective goal among auditors and staff is accountability, good governance,
ID: 2427199 • Letter: T
Question
The collective goal among auditors and staff is accountability, good governance, and transparency. Cooperation is necessary to perform an effective and efficient audit. For this Discussion, you are an auditor for an auditing firm. The previous auditor assigned to the client quit. You have been brought in to the assignment mid-way through the audit and the staff is not being cooperative. Describe the role of management with respect to the financial statements and the test of controls effectiveness and operation. Assess the requirements and restrictions regarding the use of internal audit personnel. Explain the impact of the previous auditor's refusal to provide a reason why he or she resigned from the potential client or why he or she refuses to meet with the new auditor when the staff at the company is not cooperating.
Explanation / Answer
Role of Management : As given in the above situation Auditor have taken the assighnment from the mid of Audit, this increas the responsibility of the management in which he is performing audit. Management should introduce him with thier internal controle system of Audit & Accounts. For better understanding of financial statements like, Balance sheet/ profit and loss statements and Cash flow statemnt etc. they should instruct to there internal accounts handling department to Cooperate with new Auditor. As far as internal coopration is cosidered management is responsible to take effective decisions.
Internal Audit Personnel :
(a) Requirement - Auditor needs to ensure himself that how much he can trust on internal audit personnel or on the work they have done with the earlier auditor who has quit audit. Its totally on auditor to belive or not on earlier work but if he does so he will be responsible for that work.
(b) Restriction - Auditor needs to restrict himself for works of earlier auditor which have been done by him beyond his rights and duties.
As the previous auditor has not given any reason for his refusal to audit, audit firm can ask him to do so. but this will impact the work of new auditor as the client is a potential client that represent a regular or important client he may ask for a reson for refusal of previous auditor. All this will impact the work of new auditor as he has to adjust in a new situation and survive to produce the best result asaudit report.