4. cotrolloing
TRANSCRIPT
A system by which an auditor obtains reasonable assurance that: his expression of audit opinion
reflects observance of approved auditing standards
any statutory or contractual requirement
any professional standards set by him or his f irm
A system of : Delegating the responsibil it ies to
the subordinates Directing how to conduct an audit Supervision the staf f Review the work per formed by
them
Control has to bo exercised through some laid down procedures for which no hard and fast rules. It depends upon the organisational structure of the audit f irm, to which extenet the audit work has been delegated.
Every control should take into consideration the following elements: Audit staf f should be equipped with
necessary training, experiance and profeciancy
Audit staf f should brief with: Their responsibil it ies and objective Nature, Extenet and Timing of the
planned procedure Accounting and Auditing problems
Working papers Procedures established should ensure
that: Work per formed by audit staf f is
reviewed by a senior Audit work was adequately per formed Work per formed confirms the result
obtained Result derived ful ly suppor t the
conclusion forming basis of audit repor t
The audit work should be delegated to assisstants in a manner which provides reasonable assurance that the work shall be per formed with: Independence Skil ls Competence required under the
circumstances
Direction to assisstants would include: Their responsibil it ies Objectives of procedures to be
per formed Nature of business Accounting and Auditing problems
that may occure Audit programme Time Budget and Planning
Memorandum
Supervisors per form the functions of: Monitor the progress of the audit to
consider whether: Assisstants have the necessary
skil ls and competence Assisstants understand the
directions Work is being carried out in
accordance with the overall audit plan and the audit programme
Address signif icant accounting and auditing questions raised during the audit
Resolve any dif ference of professional judgement between personnel
I t includes: Work has been per formed in accordance
with programme Work per formed and results obtained
have been properly documented All matters have been resolved Objective of audit procedures have been
acheived Conclusions are consistent with the
result
Quality Control refers to al l measures under taking by an audit practice which are designed to assist in achieving a high quality of audit and of the audit repor t issued and wherever considered necessary to improve quality.
1. It promotes observance of the professional standards relevant to the work of an Auditor.
2. How overall quality of the work carried out within the f irm can best be monitored and maintained.
3. Provides reasonable assurance that al l audits carried out by the f irm are per formed in accordance with approved auditing standards.
4. Reduce the audit risk by ensuring that an opinion on the f inancial statements is properly arrived at and worked.
5. Firm must have suf f icient direction, supervision and review of work at al l levels to provide reasonable assurance that the work per formed meets appropriate standards of quality
Factors af fects the nature and extent of the policies Size of f irm Nature of f irm’s practice Number of f irm’s of f ices Organization of Firm
1. Professional Requirements2. Skills and Competencies3. Assignment4. Delegation5. Consultation6. Acceptance and Retention of Clients7. Monitoring
Personnel in the firm should adhere to the principles of independence, objectivity, confidentiality and professional behaviour
The firm should be staffed by personnel who have attained and maintained the technical standards and professional competence required to enable to fulfill their responsibilities with due care.
Audit work is to be assigned to personnel who have the degree of technical training and proficiency required in the circumstances.
There should be sufficient direction, supervision and review at all levels to provide reasonable assurance that the work performed meets appropriate standards of quality.
Whenever necessary, consultation within or outside the firm is to occur with those who have appropriate expertise.
An evaluation of prospective clients and a review, on an on-going basis, of existing clients is to be conducted. In making a decision accept or retain a client, the firm’s independence and ability to serve the client properly and the integrity of the client’s management are to be considered.