FUNDAMENTALS AND PRINCIPLES OF AUDIT
The auditor may be engaged to perform statutory and non-statutory roles of
auditing. In this regard, the professional body to which an accountant belongs
sets out the fundamental principles expected to guide his conduct in rendering
services to his varied clients. The guidance is contained in a set of rules usually
referred to as “Code of Ethics for Members.” The Code when taken with the
ethical guidance issued by the professional bodies, for example, the “Rules of
Professional Conduct for Members” issued by The Institute of Chartered
Accountants of Nigeria, ensure that the professional accountant maintains the
highest quality of performance and public confidence in the profession.
The auditor also needs to ensure compliance with the accounting and auditing
standards in the discharge of his professional duties. There are sanctions for
erring members, ranging from loss of membership status in grievous cases, to
reprimands and fines on non-grievous cases.
The auditor should have good knowledge of auditing techniques, their
limitations, audit evidence and documentation. The use of auditing techniques,
audit evidence and proper documentation enable the auditor to accomplish
his or her statutory (or other) roles in a manner that leaves other professionals
who may need to review or evaluate his working papers in no doubt as to the
nature of work done, actually meeting professional standards and really
supporting the audit opinion.
The need for strict adherence to ethical rules and guidance on independence,
objectivity, integrity, confidentiality, skills, due care and competence enable
the auditor to act in a professional manner and earns the auditor the respect of
the investing public and entrepreneurship. It also enables the auditor to
moderate his or her conduct, on regular basis, so as not to run foul of the
regulations of his professional bodies, as well as the law. A recent development
is the passing of a law under which a professional accountant, whether in
practice or in business, who fails to see to proper compliance with accounting
standards in Nigeria, may, on conviction, be fined or jailed.
The concepts of true and fair view, materiality and judgement guide the auditor
in the conduct of his assignment. The concepts help the auditor to know the
level and quantum of the transactions and balances to which he should pay
attention, and matters which need to be considered in the expression of opinion.
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