Substantive audit procedures for accounts payable may include both substantive analytical procedures and test of details. In the final analysis, while we as internal audit professionals may not be independent of the organization, we must nonetheless maintain our objectivity when conducting our work. Hence, in substantive procedures to gather audit evidence on accounts payable, we usually place our attention more on the area that exposes to the high risk of understatement of accounts payable. Audit risk. Example. The auditor may issue a favorable report to increase the sale price of ABC Company. Board or audit committee minutes should reflect decisions regarding audits, such as external audit engagement terms (including any decision to forgo an external audit), the type of audits to be performed, or why an audit of a particular area is not necessary. An audit opinion states the results of the audit and whether there were any problems found. There are a range of different types of audits, from financial to health and safety, but regardless of the focus, the objects remain the same. Issue. ii. The risk that the auditor expresses an inappropriate There is undue dependence on any audit client or group of clients. The internal audit might have different objective from an external audit or statutory audit. Objectivity requires that internal auditors do not subordinate their judgment on audit matters to others." The objectivity of the external auditor may be threatened or appear to be threatened where: (Solved) The objectivity of the external auditor may be threatened or appear to be threatened where: i. Audit findings are typically reported in writing as well as verbally. An advocacy threat exists if the auditor is involved in promoting the client, to the point where their objectivity is potentially compromised. The concept requires the auditor to carry out his or her work freely and in an objective manner. Audit objectives vary base on the types of audit engagement and the scope of the audit. Objectives of an Audit – 2 Main Audit Objectives The objective of an audit is to express an opinion on financial statements, to give the opinion about the financial statements, the auditor examines the financial statements to satisfy himself about the truth and fairness of the financial position and operating results of the enterprise. There are typically four different audit objectives: define and test controls, verify proper procedure was followed, determine risk of audit error, and write audit opinion. An audit is an objective review of one or more aspects of your company. auditors, other bank personnel, or external third parties. Independence requires integrity and an objective approach to the audit process. 4. Auditor independence refers to the independence of the internal auditor or of the external auditor from parties that may have a financial interest in the business being audited. There are frequently misunderstandings about the external auditor’s role, who the audit is for, and what the audit’s scope is meant to achieve. The auditor is assisting in selling ABC Company while also serving as the auditor for the company. Audit findings are the results of an internal or external audit. The main objective of the work performed by the auditor in an audit engagement is that of obtaining reasonable assurance as to whether the financial statements, as a whole, are free from material misstatement, so that the auditor is able to express an opinion on the financial statements and report accordingly in the auditor’s report. Audit evidence and the objectives of an audit. The software does not, however, replace the need for the auditor's own procedures. The overall objective of an auditor, in terms of gathering evidence, ... identifying risk areas and by performing certain substantive procedures.