Audit and assurance Essay Example | Topics and Well Written Essays - 2500 words

Audit and assurance - Essay Exampleiples and standards allowed the management of corporations to manipulate their accounts easily and correspond to their own desires leaving behind misery for shareholders and a whole lot of mess for the regulators and the government to manage. This discussion paper will examine the arguments targeting the auditing profession that damned auditors for not performing their responsibilities and for not doing enough to detect and prevent these cases of fraudulent activities of major corporations in the US. This discussion is supported by presenting details of five distinguished accounting fraud cases which made the headlines and in some cases where auditors were also involved in assisting management in their malpractices.The auditors economic consumption is primarily viewed as that of verification of monetary statements prepared by businesses. However, traditional view of it remained that auditors are responsible for detecting and preventing accounti ng frauds. The transition from this view to that of independent verification of financial statements was led by emergence of huge conglomerates where shareholdings are dispersed and the concentration of auditors investigation is not on the managements honesty in preparing their accounts (Singh 2003). ISA 200 provides details of overall responsibilities of independent auditor and sets out the scope and nature of audit activities to be performed in accordance with international auditing standards. It states that the auditors role is to increase the confidence of users of financial statements by making a presentation on all material aspects of information disclosed in financial statements. However, it emphasizes that auditors do not relieve management from their role in corporate governance and ensuring the correctness of information provided in financial statement. The auditors are required to provide reasonable or high assurance regarding that financial statements are free from mat erial misstatement. However, it is not in anyways an