Auditing & Assurance Service

Questions: 1. Are auditing standards important and do they matter? 2. Cybersecurity, auditing and audit committees. Discuss. Answers: Importance of Auditing Standards Basically, auditing standards can be defined as the predetermined guidelines, rules, regulations and policies that used by the auditors in order to determine whether financial statements have been prepared in accordance with generally accepted accounting principles and in an effective and more significant manner (Brigham Daves, 2009). Along with this, it should also be noted down that, the auditing standards also develops a clear understanding in the mind of auditor about the audit process and reviews the client business and performs audit risk analysis. On the other hand, it is also analyzed that, auditing standards also assists the auditors in knowing the industry standards or guidelines which the business firms or companies operates. Apart from this, it can also be said that auditing standards are also applies by the auditors to a review of a budgetary report for a company in an effective and more significant manner (Drake Fabozzi, 2012). Furthermore, it is also analyzed that, the auditing standards that accounting and finance professionals follow are set by government agencies and financial boards around the world. For case, there are several nations that follow similar standards for the fulfillment of accounting objectives. In addition to this, it can also be said that, according to the auditing standards, the auditor would be responsible to identify the various activities in the context of assessment. Additionally, he/she would also be responsible to found different risk associated with the material error at the end monitory repost (Nissim Penman, 2001). Moreover, the auditing standards also help the assessor to evaluate whether data collected from the examiner shopper receipt/persist auditing process. At the same time, it is also analyzed that, the auditors also tries to accomplish the auditing objectives effectively. Simply, the auditing standards also helps the auditors in finding the risks factors. For case, a uditor must be specified general balance-related and a transaction-related audit objective to the company (Stickney, Weil, Schipper Francis, 2009). On the other hand, according to the auditing standards, the primary responsibility of the audit firm is to ensure audits is done right and with integrity. In the case of end result is an unqualified audit report, the audit firm responsibility is to detect fraud or misstated financial reporting or information and after find the issues or fraud report in question in the final audit report (Thomas Chizek, 2003). Hence, on the basis of above discussion, it can be conclude that, in the current time, auditing standards should be used by the business and other firms in order to avoid accounting and financial error in an effective and proper manner. Auditing Standards also important because these deals with audit procedures and tasks that is planning, executing, and reporting to carry out in response to the high financial risks or problem areas. On the other hand, it is also observed these also reduce financial risks. Auditing Standards are also associated with the recruitment of auditor, collects importance information, discusses the scope and objectives of the audit with management or auditor, decides audit processes, evaluates existing controls, and planning of the remaining audit steps. Cyber security, Auditing and Audit Committees Cyber security: In todays more challenging and globalized business era, with the increasing importance of information and technology, cyber security is one of the main topics because in the current computerized scenario, different organizations are affected by the internal information attack in numerous ways in different manner. For instance, the internal information attack is the process of the use of the different technology in an unethical or illegal manner to acquire unauthorized access of perceptive as well as confidential information on a computer system or the internet. For case, internal information attack influence the profitability, productivity, revenues, goodwill, reputation in a negative manner at the global level. It also generates fear in the mind of the users to use the internet services such as: e-commerce, e-business, e-trade, etc. in an appropriate manner. Basically, cyber security can be defined as the information technology security that mainly focuses on protect ing computers, networks, programs and data from unintended or unauthorized access, change or destruction. Moreover, it also protects the private and confidential data or information of the users (Theohary, 2010). Auditing: Basically, auditing can be defined as a significant process or activity about the systematic and effective examination and verification of financial and accounting records reports in an effective and proper manner. Along with this, auditing is also the organized process of examination of documents, accounts, books, and vouchers of a business firm in order to analyze and evaluate the financial records as well as transactions/records reflects true and fair value (Thornton, 2010). Along with this, it should also be noted down that, the auditing process also ensures that the books of accounts and finance are maintained and used properly as required by law. At the same time, it should also be noted down that, the main aim and objective behind the auditing is to research and find out whether the financial/accounting records/statements of a particular concern demonstrate an accurate and fair vision of the earning and financial position of a business. Hence, it can be said that, au diting is the significant, systematic and independent process of examining the data, statements, records, operations and performances of an organization or company for a stated purpose (Whittington Delaney, 2011). In the same way, auditing reduces the financial and accounting issues and improves the productivity of the organizations in an effective and proper manner. An audit committee: An audit committee is referred as a group of selected persons of members of a company's board of directors. All these members are fully liable and responsible to assist the auditors. Along with this, the audit committees also manage and control a lot of financial and accounting functions in an effective and proper manner so that accountability, reliability can be maintained properly. Audit committee plays a critical role in the public accounting firm internal control system. Audit committee generally focuses on internal control over financial reporting as well as audit committee are played major role in internal controls related to operation. The appropriate explicit or theoretical framework also helps the audit committee members to control internal system. The explicit or theoretical framework underlines or describes the role of the board and the role of audit committee by delegation or regulation that played major role to create an effective control environment in public firm (Ruppel, 2006). References Brigham, E.F. Daves, P.R. (2009). Intermediate Financial Management (10th ed.). USA: Cengage Learning. Drake, P.P. Fabozzi, F.J. (2012). Analysis of Financial Statements (3rd ed.). USA: John Wiley Sons. Nissim, D. Penman, S.H. (2001). Ratio Analysis and Equity Valuation: From Research to Practice. Review of Accounting Studies, 6, 109154. Ruppel, W. (2006). Not-for-Profit Audit Committee Best Practices. USA: John Wiley Sons. Stickney, C.P., Weil, R.L., Schipper, K. Francis, J. (2009). Financial Accounting: An Introduction to Concepts, Methods, and Uses (13th ed.). Canada: Cengage Learning. Theohary, C.A. (2010). Cybersecurity: Current Legislation, Executive Branch Initiatives, and Options for Congress. USA: DIANE Publishing. Thomas, E.M. Chizek, C. (2003). The Seven-step Process to Risk-based Auditing. The Institute Of Internal Auditors, 2(4). Thornton, G. (2010). Planning the external audit. Whittington, O.R. Delaney, P.R. (2011). Wiley CPA Exam Review 2012, Auditing and Attestation (9th ed.). USA: John Wiley Sons.