ACCOUNTING

Accounting assignment

Accounting assignment

QI) Steps auditor must take before accepting the appointment

According to the first schedule of chartered accountant act, the newly appointed auditor before accepting the appointment offer has to ensure that company has acted according to the rules and regulation of companies act(Carnaghan, 2006, 170-204). Moreover, ICAI has developed a framework to help auditor in making certain that employer or company has acted according to the section 224, 224A, and 225. In addition to this, an auditor before accepting the appointment offer must verify the following aspects of the company

Auditors before accepting the appointment letter confirm the board of directors of the company has passed the obligatory declaration for his appointment immediately after the registration of the company.

On the other hand, if the auditor has been appointed by the shareholders in the general meeting that it is imperative for the auditor to ensure that company has issued appropriate notice of the meeting, and must confirm that auditor declaration has been unanimously passed in the meeting

In addition to this, if this is a causal opening than auditor must try to identify whether the board of directors of the company has the authority of hiring an employee to fill the empty position, and that board has passed the required declaration

If the position has vacant because of the resignation of existing employees that the auditor must find out whether board of directors have acted according to the regulation and has passed the appropriate declaration

Thus, before accepting the appointment offer the auditor must carefully analyze the above-defined documents, and must ensure that company is operating according to the charted accounting act and according to the companies act.

Q2A) the audit expectation gap

Several client misinterpret the character of the demonstrate task, particularly with respect to incompetent estimation. Majority of the customers thinks that an incompetent estimation explains that organization has provided authentic financial reporting (Coderre, 2003, pp. 2-10). On the other hand, majority of the individual belief the auditor must not only endow with audit judgment, but must analyze the financial performance of the company in a way that it could become easy for the individual shareholder to understand the financial performance.

In addition to this, there are individual that anticipate auditors to execute their responsibilities esthetically while executing the attest job like seeking into company affairs, participating in organization inspection and identifying unlawful act or fraud with respect to management responsibilities(Eilifsen et al, 2001, 193-207). Thus, these intense and elevated expectations of public are primary source of initiating a gap between auditor and general public expectations over the functions of audit. Thus, the lean shareholders and public believe that it is the top priority of the auditor and organizational authorities in reducing the prevailing gap. The concept of “audit expectation gap” has been defined by audit experts and regulating board as

The dissimilarity among the height of anticipated presentation as visualize by the autonomous accountant and by general user of company financial statement. Similarly, the Cohen commission has further elaborated the above-defined definition by ...