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Auditor Case Study: Lack Of Information

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The collective goal among auditors and staff is accountability, good governance, and transparency. Cooperation is necessary to perform an effective and efficient audit. For this discussion, you are an auditor for an auditing firm. The previous auditor assigned to the client quit. You have been brought in to the assignment mid-way through the audit and the staff is not being cooperative. Describe the role of management with respect to the financial statements and the test of controls effectiveness and operation. Assess the requirements and restrictions regarding the use of internal audit personnel. Explain the impact of the previous auditor's refusal to provide a reason why he or she resigned from the potential client or why he or she refuses to meet with the new auditor when the staff at the company is not cooperating.

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Solution Summary

The answer to this problem explains the impact of lack of information. The references related to the answer are also included.

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Since the staff is not being cooperative, you can ask the client to provide a consent and acknowledgement letter. According to the law the successor auditor must request that the client authorize the predecessor auditor to allow a review of the predecessor auditor's working papers. Once the consent and acknowledgement letter is received from the client the preceding auditor has to hand over the auditor's working papers to you.

According to the Sarbanes Oxley Act, the top management must individually certify the accuracy of financial information. In addition, the penalties ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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