The audit process of a company usually includes a review of financial statements and control systems. This process is carried out to identify the noted deviations from the established accounting procedure and significant violations in the preparation of documentation and reporting by the Alaska communications system. It is worth adopting a non-statistical approach to assessing controls to retain the ability to use historical data.
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In addition, to save time, it is possible to reduce the sample by increasing the degree of deviation from the selected procedure and choosing a low score. For a direct assessment of financial statements, it is better to use a haphazard, non-statistical approach with a preliminary adjusted estimate of material variance. The size of the substantive audit sample will also depend on the risk assessment results of control systems (Popovici, 2019). Based on the data received, a detailed report and a shorter conclusion will be drawn up, briefly reflecting all the data received.
The conclusion is formed primarily depending on two indicators: misstatements in reporting and the sufficiency and relevance of the evidence obtained. Distortion detection techniques include the iron curtain and rollover approaches (Choudhary et al., 2020). The first method is based on balance and boils down to its accuracy at the expense of determining profit and loss, while the rollover method is the opposite. Historical data will allow choosing the best method since when the company’s costs are overestimated, the iron curtain method will lead to more and more inaccuracies every year.
The auditor should be guided by impartiality, professionalism, and objectivity since these norms form the basis of the essence of the auditor’s activities. Confidentiality, skepticism, and independence, coupled with honesty, are also ethical determinants of any audit process. Consequently, the ethical problem that an auditor may face in a given company is a failure to follow these qualities, which can call into question the professionalism and the human qualities of the auditor.
Choudhary, P., Merkley, K. J., & Schipper, K. (2020). The Costs of Waiving Audit Adjustments. Available at SSRN 3112957.
Popovici, M. (2019). Reflections on risks in fixed assets audit. Ecoforum Journal, 8(1).