Threats To Audit Independence And Safeguards

Situation

For the smooth management of the organization and the better understanding of the factors that are related to the aspiration of the management and the auditors of the organization. There is a need to the better management of the organization, which is established. The information and the better understanding of the situation are greatly supported with the help of the smooth operation of the organizational audit process. The achievement of the organization is greatly supported with the help of the Audit programs and the managerial skills of the auditors. In this assignment, it is essential that the better management of the organization are highly depended upon the better management of the Audit program.

In terms of the proper understanding of the auditing situation it is clear that the better understanding of the situation requires clear viewing of the situation which are gathered in proper understanding of the of the financial status. There are situation that are required for the better management of the situation in threat to the independence. The following are the risks that are related to the independence of the auditors.

Situation	a. Threat	Justification Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	b. Safeguard	c. Assessment of Audit Independence
1. The situation marks the auditing situation where we being an audit organization provide advice to the group of the organization and other managerial group. It is evident that the better development of the organization and their financial strength are properly judged by the organization of audit. In here the audit organization, provide the accounted and the audit performance criteria through which there is clear understanding of the situation and the better application with the consultation of the trial balance of the organization. Most of the information are better managed with the help of the organizational financial structure. The situation is better managed of the situation, which marks the opportunity that guides the management of the organization under the audit group to understand the factors of the operation.	The threat here identified in the assignment is related to that of the advising threat	The threat that is prominent in the organization over the auditor is the advising threat. The advising threat is prominent as the objective of the auditor is to make the organization safe and secure in terms of financial constraints (Bebbington and Larrinaga, 2014). Now the providing of the advice to the organization gives rise to the situation where the miscalculation of the threat may lead to the fall of the reputation.	The proper understanding of the situation and the better diplomatic results would be highly appreciated. The proper clarification of the opportunity and the support of the organization would be highly supported in safeguarding of the threat. It would be highly supported if the auditor marks the situation and provide the justification of every opportunity (Birt et al. 2014).	The achievement of the independence is clearly achieved in case of the scenario. It is obvious that the manager of the audit group have clearly supported the organization in making the decision on the proper development of the organization in terms of the financial status (Bracci et al. 2015).
2. In this situation of the organizational member have been offered a job art someplace else after the current audit procedure and workings	The threat here disguised is the threat from the ex-staff of the audit organization	Since, it is noticed that one of the employee of the organization is going to leave the organization due to the better offer at somewhere else. The achievement of the organization and the smooth understanding of the employee who is going to be an ex may result in the leaking of the I information from the previous organization	In terms of the better supporting of the organization with the achievement of the clear keeping of secret, the member can be attentive in making the would be ex-employee sign contract that would prohibit him or her from disclosing of the information	The assessment of the independence is yet not clear here, as there is no such information about the achievement of the situation (Camfferman and Zeff 2014).
3. In this case it is seen that they have a number of decision over a particular matter related to the nature of the audit procedure that the audit organization inculcates in the operation	The situation here discussed in the case study, is based on the threat over the auditor in terms of the multiple referral threat	It is clear that the threat here the auditor will encounter is the threat of multiple referral since, the management of the organization are questioning upon the proper nature of audit process and on the other hand the high authority have reacted satisfactorily over the operation of the audit procedures (Craig et al. 2014).	For the proper safeguarding from the situation of the multiple referrals, the auditor needs to be focused over the work that he is conducting. Perceiving of the information would not mind the operation but the proper accessing of the solution needs to be evaluated in proper manner, so that there are no such issues in relation to the multiple threat referrals.	The independence of the auditor has been compromised in the organization, as there are multiple referral of the work that the auditor is performing in the organization.
4. The situation discussed in the case study is based upon the replacing of the seat of fiancé director from Carol Ling to Eric Lay	The situation in the case study marks the threat over the independence of the auditor in terms of relationship threat.	The situation is a bit confusing and critical as it shows a string of tangled relationship with the organization. The relationship of the new finance director with the long-term audit manager Bruce Li is quite well known. On the other hand, it is seen that that Bruce Li was best man in Eric’s recent marriage (Dyckman and Zeff, 2015).	For the proper safeguarding of the situation it is clear that the man agreement needs to be clear regarding the situation, which would, marks the establishment of the protocol in not reengaging relatives in the operation of the organization.	In this case study it is clear that achievement of the organizational audit independence is compromised in the organization after the recruitment of the new finance director of the organization.
5. The case study provide the information about the mismatch of the statement and the organizational superannuation report with the that of the Australian taxation office	The threat associated with the organizational operation in relation to that of the auditor’s report is self-review.	The justification in case of the situation is the views of the ATO in terms of the mismatch regarding the income and investment statement with that of the organizations and that of the ATO office (Edwards, 2015).	In terms of safeguarding such situation, the auditor need to be cautious about the checking of the organizational report and the income statement provided. Double check of all the transaction would result in better managing of the situation	In this relation to the case scenario, it is clear that the independence of the auditor ids compromised in the organization.

The support of the organizational auditors comes from the situation, which marks the proper responsibility in the organization with the following of the ISA 240 standards. The achievement of the proper fraud free organization, the management needs to be clear in implementation of the standard provided in the ISA 240 (Watts and Zuo 2016).

From the above points that shows all the required steps that are applicable to the working capability of the organization in terms of being a fraud free organization and mitigating the fraud chances.

1. This point is clearly an important responsibility of the auditor in the organization. However, it is seen that the values of the ISA 240 does not provided any instances on the relation to the following point.
2. This clear information to the audit is information that is clearly related to that of the ISA 240. The opportunity of the auditor is only applicable if the proper following of the standard in ISA 240 is followed. Here, the auditors are inferred to make critical decision changes in the organization with the unbiased look and proper evaluating eye over every operation to mitigate the situation of fraud (Tricker and Tricker 2015).
3. This point is clearly instructed in the ISA 240, as it shows all the proper information regarding the audit procedure, giving the proper upper hand in identifying the risk and the actual object and situation that is being affected by the fraud.
4. This option in terms of achieving the aspect of fraud free operation in the organization is clearly one of the most important aspects in the aspect. The development of the organization marks the situation in terms of the similar aspect in ISA 240. However, the aspect mentioned in the above point is not exactly mentioned but is implied in the ISA 240.
5. This point is clearly situated in the golden word of the ISA 240. The proper managing of the transaction and finding of the actual fraud epicenter is important in the field of making the organization clear of the fraud aspect ( and Freier, 2014).
6. This point is not clearly mentioned in the organization as it is implied in the status of the ISA 240 that the auditor need to be clear about the instances that shows the implication of the fraud terms in the organization. Thus, it is clear that the valuation of the work in the organization.
7. The testing of the appropriateness is not installed in the IAS 24. However, it is clear that the valuation of the situation in the fraud mitigation process needs to evaluate in proper manner, which is included in normal acceptance of the work of auditor in an organization.
8. It is not one of the responsibilities of the auditor in the process of mitigating the fraud. On the contrary, to the standard placed by the IAS 240, it is clear that the responsibility list does not include the mentioned responsibility (Soh et al. 2015).
9. It is clear that the Auditor needs to be clear about the situation of the organization and must retrieve all the documents in terms of the mitigation of the fraud in the organization.
10. In terms of the IAS 240, the auditors needs to be informative regarding the situation of the organization and also about the policies if those have the indication towards the fraudulent act.
11. The misstatement s of the values in the organization gives rise to the misunderstanding of the situation the organization actually is. This kind of situation marks the situation where the organization faces the problems in terms of the audit risk. The auditor may face challenges in terms of ascertaining the value of the assets in the organization. Moreover, the misstatement may also give rise to the problems and risk in terms of control risk (Ganda et al.2014).
12. The issue in terms of prior year figures is as it gives less amount of assumption space and the assumption is not supported with guaranteed situation where there is chance of evident changes in the organization from the previous year than current.
13. In terms of the organization the Amistad, the valuation of the objectives of the organization in the step of the going concern value lead to the situation where the organizational sometime take the work in general sense and results in the failing of work. In terms of the going  concern assumptions the misstatements of the assets rises as the mentality changes in the situation where the workers thinks the originality would not be found in lost time of past. The fair values of the organizational assets are also not recognized in proper format (Granof et al. 2016).
14. On disregarding the following of the management assessment would result in the situation where there is no clear understanding of the situation and thus may result in the fall of the operation of the organization (Sin et al.2015).
15. In terms of the internal control issue in Amistad, it is evident that the organization faces the prime problems in the managing of the key business cycle. The key business cycle is not clearly mentioned in the organization as results as the internal control issue in the operation of Amistad.
16. In terms of the risk factors of Amistad, it is a little bit alarming that the values of the organization in terms of providing of the incentives in the organization are not properly provided however, there is a streak of providing the incentive in the beginning of every succeeding month. Another risk factor marked in the operation of the Amistad, is that the organization have just managed to achieve the targeted objectives and not more than the targeted. Thus, it can be supported that the valuation of the risk factor may be in terms of fall in the actual progress than the targeted (Griffin and Wright, 2015).
17. The sales return account of the organization Amistad is at risk in and it can be ascertained from the situation of pricing policy of the organization. In terms of the advices of the organization, the Amistad may face the issue in the invoicing of the values to the customers.
18. In terms of the Auditing factors of the organization, it is clear that the auditor of the organization needs to be supportive enough in determining the exact fact of the risk statements and the assessing of the target area of the risk. The using of the managerial skepticism also helps in the better managing of the risk factor in the organization (Rinaldi et al.2014).

a. Deficiency	Explanation	b. Control	c. Test of control
Inadequate documentation	Documentation gives confirmation of the shrouded trades. It is the commitment to setting up real cash related records. Budgetary reports should be pre-numbered to ensure all trades are recorded and spoken to. Regardless, it is seen that there is no such measures (Henderson et al. 2015).	In terms of controlling the deficiency of the management of the organization keep the shade of the situation where there is clear understanding of the value that are included in the organization (Mora, 2017).	Finding of the documents within time when required will be possible
Business cycles not clear described	Executives and proprietors don’t see the need to make made methodologies and approach or essentially even major flowcharts describing the key business frames, as some free wander shapes appear, all in all, to be uncomplicated. This however is apparently a champion among the most unused control instruments where the most regard can be incorporated with little effort (Hodder et al. 2014).	For the proper understanding of the life cycle of the organization, the management of the organization can go for the proper selection of a date of origin (Mohammed Sarea and Mohd Hanefah 2013).	Knowing business cycle duration assess to set the priorities within the business operation
No reviewing or over sighting of work	Business visionaries normally get so required in the regular operations of the business that they tend to dismissal performing basic study strategies. Business visionaries should take some time and excitement for the cash related records. This is a fundamental piece of blackmail evasion. Not an impressive measure of time is required to study month-to-month earnings, utilization reports, stock reports, spending versus genuine entireties, and change reports (Humphrey and Beard, 2014).	Giving proper assigning of work to the managers of the or5ganbiation would help in managing the situation.	Proper formulation of the job and other aspect
Lack of logical security	Nonattendance of physical security of business assets and resources could achieve the disaster or mischief to assets and resources. Access to adapt, insignificant cash, and check stock should be limited to legitimate individuals and set away or secured a fitting secure zone (Mattessich, 2016).	Proper ascertainment of the logical comments would help in mitigating the situation.	Proper safety in the better managing of the
Lack of ethical policies and procedures	This control may not seem, by all accounts, to be fundamental for the achievement of a business, however without clear standards on the use of the business assets and wishes, similar to dependability and ethics from delegates, associations can open themselves to inefficient perspectives and misappropriation of advantages. A code of ethics is an open introduction of the way an affiliation works (Macve, 2015).	Following of the ethical code of principles in the organizational work would support the better management of the organization (Johansson et al. 2016).	In terms of better controlling the organization, the management would find smooth understanding of the factors and act of responsibility would rise.

Conclusion

From the above assignment, it can be supported that the smooth management of the organization are based on the better understanding of the situation, which gathers the responsible answer of organization for proper operation of the organization in the better stability of the organization. It is clear that the successes of the organization are based on the better availing of the support from the auditors in the organization. In most of the case, scenarios provided in the assignment have provided the situation of the fraud and the responsibility associated to mitigate along with the threat to the independence of the organizational auditors. Thus, it is clear that the valuation of the proper accounting work requires clear understanding of the situation which gives rise to the better development of the organization.

Threat

References

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