Audit Declaration and Acquiescence Process

Question: Discuss about the Audit Declaration and Acquiescence Process. Answer: Introduction: Christensen, Glover Wood, (2012) indicated that audit serves as the technique of verifying several accounts of an organization. The case study explained that the auditors have the responsibility to plan at the time of auditing and at the same time complying with Generally Accepted Accounting Principles (GAAP) regulations. Auditors are in charge of issuing two major types of audit reports that encompass no skills qualifies and unqualified audit reports. This is after conducting the audit procedure of a company. The opinion of the qualified auditors indicates the opportunity of the mentioned financial and accounting information that is prohibited and the company has not complied with the principles of GAAP efficiently (Cohen Simnett, 2014). The auditors requires to consider several aspects of an organizations financial position that can impact the banks investment decision as well as of banks, investors and financial institutions. The King and Queen company was observed to experience severe liquidity issues after the debtors turnover and poor inventory turnover. The case indicates increased efficiency of organizations in asset maintenance (Decaux Sarens, 2015). King and Queen company has auditors those intend to be highly cautious of the organizational case and the situation of the organization was not offered increased importance. For this reason, the company has not employed efficient measures in measuring proper asset values. Moreover, the auditor has also not considered the fact that further process is required to ensure inventory and debtor valuations of the company. The above indicates the case of auditors responsibility negligence and certain cases pertaining to the same are mentioned below: According to the case study Hedley Byrne and Co Ltd v Heller and Partners (1964) AC 465 a particular circumstance appeared that highlights the impact of audited report. Moreover, from detailed study of this particular case, it has been noted that the audited report was prepared by a professional auditor only with the aim to take an effective decision. The KPMG Peat Marwick vs. Law Society and Others; CHD 3 NOV, 1999 case explained auditors organizations is based on the auditors decisions (Duncan Whittington, 2014). Generally Accepted Accounting Principles (GAAP) evaluation explained that sustainability is to be maintained by audited party and auditors (Erickson, Goldman Stekelberg, 2015). The primary instance can stand as a condition during which an auditor is able to attain valuable information, which are on the basis of the internal audit to the third party. The decisions regarding investment are deeply relied on the report of the auditors (Homb et al., 2014). The case study explained, King and Queen will not reveal the internal financial information that reduced EFL based liabilities. This is due to the fact that it might go against the rules of GAAP in order to reveal certain information, which are in relation to the internal audit (Sta?iokas Rupys, 2015). The incapability of King and Queen is observed to be decreased. Moreover, there exist two types of conditions, which if considered might reveal answers relying on the audited firm. The auditors interdependence can be indicated that after employing objective approach and integrating with the auditors technique (Mollik Berapi, 2014). Conversely, it serves to be a cornerstone for audit process. The approach of interdependence asks the auditors to finish their work in an effective manner. Actual Independence: The real independence of the auditors that is the actual independence is considered as the autonomy of mentality. It usually looks into the way in which the auditors react to the particular condition (Pitt, 2014). On the other hand, the independence of the auditors can be identified through facilitate of intellectual viewpoint and the individual reliability of the auditors. The feeling revealed by the auditors is useful in determining the independence of the auditors. These opinion presented by the auditors about the financial statements of a firm is valued via maintaining the principle summed up with the real independence (Schmidt, Wood Grabski, 2016). Perceived Interdependence: The auditors feel implying many perceptions in fighting with a particular issue that is helpful in arriving at a definite solution that is optimal (Schmidt et al., 2016). The judgment given on the basis of perceived independence may not be done via using any specific procedure as the perceptions may vary among the auditors (Mollik Berapi, 2014). As per the provided condition (first), Bob proposed to manage two tasks in conjunction with the other. At the time of performing the particular studies under the guidance of the university, it can be said that this also maintains as an assistance of auditing in the organization named Club Casino. Bob needs accomplishing the assignment of the university and at the time of carrying out the auditing techniques, he found out that financial information that can provide certain accomplishment assistance (Shah Nair, 2013). According to the alternative circumstance, it can be said that the case of the firm Ace Limited reveals that an individual named Wendy performs auditing of the particular organization for a long period of time (Mollik Berapi, 2014). The organization has not appointed company secretary and in lack of that, Wendy takes into account accomplishing all duties of organizational secretary over a time of six months (Sta?iokas Rupys, 2015). The organizations require complying with all the required regulations and maintaining certain professional behavior in carrying out associated activities in the organization (Erickson, Goldman Stekelberg, 2015). Aligning with the regulations of GAAP, the audit-acting partner might not carry out director board members responsibility along with the top management team (Schmidt, Wood Grabski, 2016). Aligning with the similar guidelines this conduct can be deemed as serious offence associated with profession of audit (Schmidt, Wood Grabski, 2016). This is because after accomplishing such act, Wendy did not comply with regulations associated with audit profession. As a result, it can be advised that Wendy should offer resignation to his current designation, as it is the only defensive appraise for this particular performance. Thirdly, it has been found that as per the situation, Leo is the eldest child of a worker who works in an organization named Precision Machinery Limited. After the completion of the vacation work, Leo was provided with serving as internal auditor of the chosen company. Additionally, certain responsibilities were provided to the people that include evaluation of internal control and cash system payments associated with organization. This is because certain conduct results in breach of the audit processes regulations (Erickson, Goldman Stekelberg, 2015). The reason behind this is that an individual having association with another worker of the similar firm cannot be incorporated as an employee (auditor) of the identical firm as this is against the doctrines and regulations of auditing (Schmidt, Wood Grabski, 2016). However, there are two ways by implementing which breach of the rules can be avoided. A substitute, which can be found within the case of Leo, is to function as an auditor (internal) of the mentioned firm. This is because employing one among the mentioned alternatives might support the companies to comply with audit regulations. Therefore, by espousing any one out of two options, one would facilitate the corporation to meet the terms of the audit rules, procedures and regulations. Fourthly, it has been found that within the firm Classic Reproduction Pty Limited there were two auditors, namely Chan and Associate. The company is observed to deal with extreme financial issues, as this did not efficiently experience fees of Chan and Associates over the past three years (Erickson, Goldman Stekelberg, 2015). Thus, for settling down the dues, the above mentioned organization has found to give its furniture (i.e. 50 % of total exceptional fees of the audit partners) (Pitt, 2014). Moreover, the latter has found to attain 25 % of the total stocks of an unrelated enlisted corporation for convalesce the left out area of the fees from the particular corporation (Erickson, Goldman Stekelberg, 2015). In addition, the auditors may not be able to gain shares from the non-listed companies. This indicates breach on the behalf of the companys auditor. As per the regulations, rules and doctrines of the auditing, the auditors are not allowed to attain bribe as an alternative option for their fees (Erickson, Goldman Stekelberg, 2015). Moreover, the auditors are also not allowed to accept shares from any kind of unlisted corporations (Sta?iokas Rupys, 2015). It entails the violation of principle of auditing on the part of the role of an auditor (Erickson, Goldman Stekelberg, 2015). Consequently, with the aim to embark on the corrective events, both the audit partners that are Chan and Associates are required for revisiting the accepted furniture and the attained shares to the mentioned corporation of the case study (Pitt, 2014). Therefore, it can be said that such corrective actions might help the audit partners to obey the rules and regulations of the existing doctrines of auditing (Mollik Berapi, 2014). References Caron, F., Vanthienen, J., Baesens, B. (2013). Comprehensive rule-based compliance checking and risk management with process mining.Decision Support Systems,54(3), 1357-1369. Christensen, B. E., Glover, S. M., Wood, D. A. (2012). Extreme estimation uncertainty in fair value estimates: Implications for audit assurance.Auditing: A Journal of Practice Theory,31(1), 127-146. Cohen, J. R., Simnett, R. (2014). CSR and assurance services: A research agenda.Auditing: A Journal of Practice Theory,34(1), 59-74. Decaux, L., Sarens, G. (2015). Implementing combined assurance: insights from multiple case studies.Managerial Auditing Journal,30(1), 56-79. Duncan, B., Whittington, M. (2014, September). Compliance with standards, assurance and audit: does this equal security?. InProceedings of the 7th International Conference on Security of Information and Networks(p. 77). ACM. Erickson, M., Goldman, N., Stekelberg, J. (2015). The Cost of Compliance: FIN 48 and Audit Fees.Journal of the American Taxation Association. Homb, N. M., Sheybani, S., Derby, D., Wood, K. (2014). Audit and feedback intervention: An examination of differences in chiropractic record-keeping compliance.The Journal of chiropractic education,28(2), 123. Knechel, W. R. (2016). Audit quality and regulation.International Journal of Auditing,20(3), 215-223. Mollik, A. T., Berapi, M. K. (2014). Effects of Audit Quality and the Qualifications of Audit Committee Members on the Firms Compliance with IFRS: Evidence from Australias Listed Firms. Pitt, S. A. (2014).Internal Audit Quality: Developing a Quality Assurance and Improvement Program. John Wiley Sons. Schmidt, P. J., Wood, J. T., Grabski, S. V. (2016). Business in the Cloud: Research Questions on Governance, Audit and Assurance.Journal of Information Systems. Shah, M., Jarzabkowski, L. (2013). The Australian higher education quality assurance framework: From improvement-led to compliance-driven.Perspectives: Policy and Practice in Higher Education,17(3), 96-106. Shah, M., Nair, C. S. (Eds.). (2013).External Quality Audit: Has it Improved Quality Assurance in Universities?. Elsevier. Spears, J. L., Barki, H., Barton, R. R. (2013). Theorizing the concept and role of assurance in Information Systems Security.Information management,50(7), 598-605.