Ng hwee-
Independence and objectivity
- no personal relationship
- no obligations to client
- any other factors
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Competency
application of:
-due care
-knowledge
-skills
-judgement
to audit
- not accept work no staff or time
-
Ethical conduct and integrity
- professional in both personal and professional life
- must not do anything to bring disrepute to accounting profession
- avoid business dealings that puts him in conflict of interest
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Evidence
- auditors base their opinions on audit evidence.
- must give objective and independent opinion relying on evidence
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Materiality
-Whether the over/understatement would impact the FS not giving a true and fair view
- require auditors judgement
-
Audit risk
- refers to the inappropriate audit opinion on misstatements.
Due to:
-sample testing
-Judgement
-Evidence is persuasive
-
Judgement
- Auditor need to rely on evidence and experience to judge
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Scepticism: Due to corporate failure last decade, auditors need to:
- enquiring mind
- be vigilant to indicators of fraud and misstatement
- have a critical attitude to FS
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Reporting
- relied upon many users of the FS that have no access to accounting records
- customer
-supplier
-bank
- investor
- management
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Due care
- auditor's opinion must be valued and respected, thus users must be able to assume the audit is done with due care
due care:
skill
caution
professional knowledge
experience
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Quality controls
public must be confident in auditors work, controls are in place to ensure that it is of quality
- continuous training
- induction program for new staff
- files reviewed by 2 partners
- rotation of partners after years
