Auditing Essay Example | Topics and Well Written Essays - 750 words - 1

Auditing - Essay Example 9). He has the right to use such information for completing his duties rather than using it for its own purpose. However, any information used by him should first be approved by the concerned parties. It is necessary to maintain and follow professional standards while carrying out these kinds of duties. (ii) In this case, there is a breach of duty, which can be seen when Wendy performs the duty of a company secretary. As an engagement partner of the firm, Wendy has the responsibility of decision-making on significant auditing and accounting functions. The task of an engagement partner is complex and performing the company’s secretarial duties for even a little while will cause distractions in her duties and she would not be able to fulfill these duties effectively. â€Å"Generally, employees should not perform duties outside their job description† (Business Management: Internal Controls for Small Business, 2008, pg.23). It is evident that Wendy is responsible for perfor ming the accounting duties only. So in order to solve this issue, the auditor must provide suggestions to the top level management for the appointment of a new employee who would carry out the duties of the company secretary. ... 17) refers to the risk that arises in the methods adopted by the auditor to decrease audit risk. Whereas, material misstatement risk refers to the risk that occur when financial records are materially misstated prior to audit. It involves â€Å"inherent and control risk† (Christopher, 2012, slide. 17). In the first case, the company faces cost cutting and margin falling issues. â€Å"Cost cutting and pricing pressures are key risks to the business agenda† (Turn Risk and Opportunities into results 2013 The CFO Perspective- at a Glance, n.d, para. 3). Stress to cutting the costs comes not only from internal forces that function to protect margins but also from outside sources. The company pursues cost cutting plans and they expect rising competence from their partners and suppliers. In this situation, the company faces inherent risk in doing the business as nobody is aware of the occurrence of this risk.   (ii)   In the second situation, Getaway Pty Ltd faces the audi t risk in not carrying out the conservative business strategies effectively. The company faces inherent risk while reducing audit risk to a certain level. â€Å"The auditor will spend quite a bit of time at the early planning stages obtaining information to assess these risks so that â€Å"the engagement is performed in an effective manner† (Burke, n.d, pg. 1). The managers can make a decision, regarding business risks that occur due to poor information management, by determining if the time that they themselves and their assistants spend in gathering data is already available or not. Another method of measuring these risks is by observing performance data regularly and checking if reports are late or missing. 3. (a)  Ã‚  Ã‚  Ã‚  For the successful