What would you do if a client disagreed with the results of an audit?

Do the Following

1. Listen for Feelings.
2. Gather the Facts (question for facts)
3. Reassess the Situation (Determine Root Cause)
4. Restate the Position.

What is the auditor’s duty if the auditor finds that the audit client has been involved in an illegal act?

If specific information comes to the auditor’s attention that provides evidence concerning the existence of possible illegal acts that could have a material indirect effect on the financial statements, the auditor should apply audit procedures specifically directed to ascertaining whether an illegal act has occurred.

What responsibility did the auditors have to discuss their concerns with the entity’s audit committee?

The auditor should discuss with the audit committee, or determine that management has adequately discussed with the audit committee, the basis for the determination that the uncorrected misstatements were immaterial, including the qualitative factors36 considered.

When should an auditor give a modified opinion?

An auditor gives an unmodified opinion if the financial statements present true and fair view. In all other circumstances, the auditor gives a modified opinion. The auditor uses different techniques and methods and also applies different procedures to see if the financial statements are free of material misstatements.

How do you respond to an internal auditor?

You fundamentally have three ways of responding:

1. Agreement and corrective action plan. If you agree with the audit finding, simply say so, then move on with a corrective plan of action.
2. Disagreement. When you disagree with the finding, proceed with caution.
3. No response.

When an auditor becomes aware of a possible illegal act by a client the auditor should obtain understanding of the nature of the act to?

8 However, if the auditor becomes aware of information concerning a possible illegal act, the auditor is required to obtain an understanding of the nature of the act, the circumstances in which it occurred, and sufficient other information to evaluate the effect on the financial statements, if any.

Are auditors responsible for frauds?

Although, as stated above, the auditing standards say the prevention and detection of fraud resides with management, those same standards also establish that auditors have a responsibility to obtain reasonable assurance that financial statements are free from material misstatement, whether due to error or fraud.

What happens if an auditor is not independent?

What is Auditor Independence? Auditors are expected to provide an unbiased and professional opinion on the work that they audit. An auditor who lacks independence virtually renders their accompanying auditor report useless to those who rely on them. For example, consider yourself a potential investor in ABC Company.

When the auditor issues a disclaimer of opinion on a financial report the audit report should?

A common for reason for auditors issuing a qualified opinion is that the company didn’t present its records with GAAP. When an auditor issues a disclaimer of opinion report, it means that they are distancing themselves from providing any opinion at all related to the financial statements.

Under what circumstances would an auditor issue a qualified opinion?

A qualified opinion may be given when a company’s financial records have not followed GAAP in all financial transactions, but only if the deviation from GAAP is not pervasive. The term “pervasive” can be interpreted differently based on an auditor’s professional judgment.

What happens if auditors disagree with the financials?

The auditors will have to either (a) withdraw from the engagement or (b) modify their opinion on the financials to disclose the item they disagree with and conclude that the financials are not in compliance with GAAP. (I say GAAP, assuming we are talking US company, IFRS if we are talking non-US)

Should auditors be involved in word processing or assembling financial statements?

This author has learned that at least one large CPA firm has been advised privately that the staff believes auditors should not be involved in any aspect of word processing or assembling financial statements.

What are the management’s responsibilities in an audit?

Management’s responsibilities in an audit. The auditor’s responsibility is to express an independent, objective opinion on the financial statements of a company. This opinion is given in accordance with auditing standards that require the auditors to plan certain procedures and report on the results of the audit,…

Which accounting firms are audited by auditors?

Other annually inspected U.S. auditors followed (23 inspection reports, 17.6\%), including such firms as BDO, Crowe Horwath, Grant Thornton, MaloneBailey, and McGladrey.