Asked by: Cleopatra Morete
business and finance business operations

What characteristic describes the general function of the independent auditor?

Last Updated: 12th March, 2020

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What characteristic describes the general function of the independent auditor? The financial reporting of a public company under federal securities law is a continuous disclosure process.

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Likewise, what is the role of an independent auditor?

An independent auditor either works for a public accounting firm or is self-employed. An auditor examines financial statements and related data, analyzes business operations and processes, and provides recommendations on achieving greater efficiency.

Similarly, what are the duties and responsibilities of an external auditor? External Auditor responsibilities include:

  • Inspecting financial statements to catch errors, misstatements and fraud.
  • Performing audits on systems, operations and accounts.
  • Reporting audit findings and recommending improvements.

Beside above, what is an auditor's responsibility?

Auditors' Responsibilities The auditor's responsibility is to express an opinion on whether management has fairly presented the information in the financial statements. To do so, the auditor collects evidence to obtain reasonable assurance that the accounts are free of material misstatement.

What are the five key requirements for auditor independence?

The SEC rules on audit independence can be organized into five key areas: (A) Prohibited Non-Audit Services; (B) Audit Committee Pre-Approval of Services; (C) Partner Rotation; (D) Conflict of Interest; and (E) Increased Communication and Disclosure. A.

Related Question Answers

Riasat Ferruz

Professional

What is the objective of an independent audit?

One of the primary goals of an independent auditor is to examine the company's financial statement to ensure the financial books are accurate and compliant with fiscal laws and regulations. Independent auditors inspect the accounting system and account books of a company for accuracy.

Ubay Torralva

Professional

What are the advantages of independent audit?

Helps to prevent business management and employees from possible fraud. Allows to reach low cost financing with independent audited financial statements. In a company with independent external audit, whole benefits of all shareholders are better protected..

Bozhana Vaisfeld

Professional

Who is the independent audit report addressed to?

Ordinarily, the auditor's report on general purpose financial statements is addressed either to the shareholders or to those charged with governance of the entity whose financial statements are being audited. statements that have been audited, the entity, and the date of and period covered by the financial statements.

Zdravko Jafarov

Explainer

How can auditors improve independence?

Further solutions suggested from consultation
  1. Strengthening of audit committees.
  2. Public disclosure of firms' inspections report.
  3. Enhance audit committee report and auditor reporting.
  4. Increase the IRBA penalties.
  5. Provide audit quality indicators to relevant stakeholders.
  6. Strengthen the audit regulator.

Alcora Gribnov

Explainer

How do auditors maintain independence?

Internal auditors are independent when they render impartial and unbiased judgment in the conduct of their engagement. To ensure this independence, best practices suggest the CAE should report directly to the audit committee or its equivalent.

Jeraldine Pluas

Explainer

What is the primary responsibility of an auditor?

The auditor's responsibility is to express an independent, objective opinion on the financial statements of a company. As one of their required procedures, auditors ask management to communicate management's responsibility for the financial statements to the auditor in a representation letter.

Iluminacion Jetschmanegg

Pundit

What is independent audit report?

An independent audit is an examination of the financial records, accounts, business transactions, accounting practices, and internal controls of a charitable nonprofit by an "independent" auditor.

Bonifacia Schinkel

Pundit

Who appoints independent auditor?

External auditors are appointed by the shareholders of a company, although this usually comes through discussion with directors. External auditors must be appointed from a different company independent of their own whilst internal auditors are usually employees of the organisation.

Pasty Karste

Pundit

What are the types of frauds in auditing?

  • 5 Types Of Fraud That Can Shake Your Organization To Its Core. Posted May 20, 2016.
  • Financial statement fraud. Although it's less common, financial statement fraud can be the most damaging to a company.
  • Asset misappropriation.
  • Theft of intellectual property and trade secrets.
  • Healthcare, insurance and banking.
  • Consumer fraud.

Diana Ispierto

Pundit

What are 3 types of audits?

3 primary types of audit performed by CPAs are; (1) financial audit, (2) operational audit, and (3) compliance audit. The latter two services are often called audit activities, even though they are most similar to assurance and attestation services. Types of Audit are; Financial Audit.

Kourtney Twenhoven

Pundit

What are the duties and responsibilities of internal and external auditor?

Internal auditors will examine issues related to company business practices and risks, while external auditors examine the financial records and issue an opinion regarding the financial statements of the company. Internal audits are conducted throughout the year, while external auditors conduct a single annual audit.

Shamara Symons

Teacher

Do auditors prepare financial statements?

Preparing Financial Statements and Auditors' Independence. For many audit engagements, the auditors prepare financial statements. Management must understand that preparation of financial statements by the auditor does not change the fact that management is responsible for those financial statements.

Suhaila Lambas

Teacher

What is the auditor's responsibility to detect illegal acts?

In defining the auditor's responsibility for detecting illegal acts, Statement on Accounting Standards no. That is, the auditor should design the audit to provide reasonable assurance that financial statement amounts are free from material misstatement resulting from these direct-effect illegal acts.

Gados Bargen

Teacher

What are the basic principles of governing an audit?

These principles are, namely, integrity, objectivity and independence, confidentiality, skills and competence, work performed by others, documentation, planning, audit evidence, accounting system and internal control, and, finally, audit conclusions and reporting.

Cleora Vermeeren

Teacher

What exactly does an auditor do?

An auditor is someone who prepares and examines financial records. They ensure that financial records are accurate and that taxes are paid properly and on time. They assess financial operations and work to help ensure that organizations run efficiently.

Ralph Kneschk

Reviewer

What is a qualified audit report?

Definition: The qualified audit report is one of the three modified audit reports where this opinion is issued to the financial statements that are not prepared in all material respect while those misstatements are not pervasive. Compare to the other two reports, this one is less serious than.

Adelin Andronache

Reviewer

Why the auditor must declare their independence?

The Need For Auditor Independence
The auditor should be independent from the client company, so that the audit opinion will not be influenced by any relationship between them. The auditors are expected to give an unbiased and honest professional opinion on the financial statements to the shareholders.

Pavlo Ochakoff

Reviewer

How do you explain internal audit?

Internal auditing is an independent, objective assurance and consulting activity designed to add value to and improve an organization's operations. Professionals called internal auditors are employed by organizations to perform the internal auditing activity.

Kaitlin Arriagada

Reviewer

What are the right and duties of an auditor?

10 important rights and duties of the auditor of a company in
  • Right of Access to Books of Accounts:
  • Right to obtain Information and Explanations:
  • Right to Correct any Wrong Statement:
  • Right to visit Branches:
  • Right to receive Notice and other Communications relating to General Meeting and attend them:
  • Right of being indemnified:
  • Right to have Legal and Technical Advice: