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AUDITING INDIVIDUAL
ASSIGNMENT

NAME : THATO TSHABALALA

STUDENT NUMBER : 201506736

CAMPUS : BRAAMFONTAIN

GROUP : 1

DATE 06/03/2017
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TABLE OF CONTENT

AUDITING INDIVIDUAL ASSIGNMENT 1

NAME : THATO TSHABALALA 1
STUDENT NUMBER : 201506736 1
CAMPUS : BRAAMFONTAIN 1
GROUP : 1 1
DATE 06/03/2017 1
TABLE OF CONTENT 2
Glossary of terms 3
Introduction 3
QUESTION 1 4
Question 2 5
Question 3 6
Conclusion 7
Reference 7
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Glossary of terms

TERMS DEFINATION

Company a commercial business

account a report or description of an event or
experience: a detailed account of what
has been achieved.
Business a person's regular occupation,
profession, or trade

Introduction

An audit is a systematic and independent examination of books, accounts, statutory

records, documents and vouchers of an organization to ascertain how far the financial
statements as well as non-financial disclosures present a true and fair view of the concern.
It also attempts to ensure that the books of accounts are properly maintained by the
concern as required by law
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QUESTION 1

A) Companies that undergo annual financial statement audits are generally more
profitable and better managed than companies that do not undergo financial audits.
Financial audits improve communication between management and owners.
Companies that undergo annual audits are worth more than companies that are not
audited annually.
Uncover fraudulent or other illegal activities within your company.
Reinforce and strengthen internal control.
Assess risks, economy, efficiency and quality.
Evaluate new technology.

B) Auditing is science based on fundamental principles called postulates.

- financial data can be verified

- conflict of interest does not exist between the auditor and the management of the
audited company
- The financial statement and the other information presented for review are free from
conspiracies and other iirregulation
- internal control procedures reduce the possibility of errors and irregularities
- The consistent application of international financial Reporting Standards results in fair
presentation
- In the absence of clear evidence to the contrary, what was true in the past will remain
true in the future.
- when an auditor investigates financial data in order to express an objective opinion, he
acts exclusively in his capacity as the auditor.

C) 1 external auditor is a person with the final responsibility for the external audit function,
be it a statutory audit or voluntarily requested audit. The external auditor is required to
express an independent and objective opinion as to whether, in all material respects the
financial statement of an entity fairly present ; the final position of the entity at a specific
date and the result of its operation and cash flow information for the period ended on that
date.

2 Internal auditor function is established within the organisation as a service to the

company . The internal auditors functions would include , amongst other things, examine,
evaluating and monitoring the adequacy and effectiveness of the accounting and internal
control system.
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Question 2
A) The audit work will have to have been carried out free from any restrictions and in
compliance with the required auditing pronouncements.

He will have to be satisfied that the assets liabilities reflected in the financial statements
exits

The auditor will have to have ensured that proper accounting records have been kept by
the entity in one of the official languages of the country.

The auditor will have to have obtained all information and documents needed to perform
the audit work.

If applicable, the audit will have to have adhered to all the legal requirements imposed on
him by the respective law

he will have to be satisfied that the statements give a fair reflection of results.

In the case of existence of a reportable irregularity, the auditor will have to be convinced
that the situation has been solved.

B) Reportable irregularity means any unlawful act or omission committed by any person
responsible for the management of an entity which :-

(i) has caused or is likely to cause material financial loss to the entity or to any partner,
member, shareholder, creditor or investor of the entity in respect of his, hers or its
dealings with that entity; or

(ii) is fraudulent or amounts to theft ; or

(iii) represents a material breach of any fiduciary duty owed by such person to the entity or
any partner, member, shareholder, creditor or investor of the entity under any law
applying to the entity or the connect or management.

C) Action needed to take in regard to irregularity

The auditor or , in the case of companies or partnership, the individual auditor identified by
the audit firm to take responsibly or accountability for the audit, has the sole responsibility
to report a reportable irregularity to the IRBA.

The report must give particulars of the reportable irregularity referred to in subsection (1)
and must include such information and particulars as the register auditor considers
appropriate.

The register auditor must soon as reasonable possible but no later than 30 days from the
date on which the report on which referred to on subsection (1) was to the regulatory
board.
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Question 3

A) -Responsibility pertains to management behaviour that follows internal mechanism to

allow for corrective action and the sanctioning of mismanagement. when necessary
responsible management would put in place what it takes to set to company on the right
path.

-Accountability is a key tenet of good governance. Who is accountable for what should be
documented in policy statements. In general, an organization is accountable to those who
will be affected by its decisions or actions as well as the applicable rules of law.

-Transparency means that information should be provided in easily understandable forms

and media; that it should be freely available and directly accessible to those who will be
affected by governance policies and practices, as well as the outcomes resulting
therefrom; and that any decisions taken and their enforcement are in compliance with
established rules and regulations.

-Fairness Fairness implies being unbiased and carries with it the requirement of
independence and objectivity, giving due consideration to the interests of all stakeholders
involved. It is therefore recommended that the Board of Directors be comprised of a mix of
executive, nonexecutive and independent directors.

B). (i) The board should provide effective leadership based on an ethical foundation
The board ultimately responsible to provide strategic direction to the company:
- The strategy of the board should ensure the long-term sustainability of the company with
due consideration for the impact of the strategy on the economy, the environment and
other stakeholders of the company
- The strategy and action of the company should therefore promote an inclusive approach
to governance meaning that the company should always act in the best interest of all
stakeholder.
The company should conduct its business in an ethical manner. The board should set
the value of the company and ensure the formulation thereof in a code of conduct.

(ii) The board should ensure that the company is and is seen to be a responsible corporate
citizen :
The board should : An ethical corporate culture is built and stained in the company
It determines ethical standards which are clearly understood by the company and that
the company ensures adherence in all aspects its business
Adherence to the ethical standards is measured;
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The ethical performance of external business tartars is aligned around the ethical
standards of the company;
The risk management process incorporates ethical risk and opportunity
The company introduced a code of conduct and that ethics related policies are
implemented ;
The operation of the company are based on compliance with the code of ethics;
The company assesses, monitors, reports and disclosed its ethical performance.

Conclusion
An audit helps organisations achieve goals and objectives by measuring overall
performance and productivity, as detected in transactions and business records, according
to The Houston Chronicle. Further, an audit protects an organisation from financial
misstatements, presenting a reliable health picture of the organisation to the markets.
Fraud protection is a benefit of audits achieved through internal controls that prevent and
detect accounting irregularities. Strengthening the financial integrity of an organisation
through an audit reduces risk and the cost of capitol.

Reference

-The Corporate Governance of Iconic Executives, 87 Notre Dame Law Review 351 (2011),
-Power, Michael. 1999. The Audit Society: Rituals of Verification. Oxford: Oxford University
Press.
-http://www.russellreynolds.com/newsroom/splitting-the-ceo-and-chairman-roles-yes-or-no
-http://www.icai.org/post.html?post_id=6193