Report in auditing Essay Example | Topics and Well Written Essays - 1250 words

Report in examineing - Essay ExampleThe situation that the external auditors will not be able to physically inspect or examine the audit procedures does not comply with the GAAS (Standards of Field Work, No. 3). This standard explicitly requires the auditors ability to examine, inspect, observe and confirm the chronicle information obtained during the audit procedures.Standard No. 3 of GAAS General Standards requires mental independence on the vox of the auditor, which might not be fulfilled because the acquiring auditing firms principal partner is a cousin to TPCs CEO. In this situation, the auditor might not be able to give a free and independent suasion and rather be under significant pressure throughout the process.The last situation is entirely in violation of GAAS Standards of Reporting No. 1. This standard requires that the companys financial statements should be in full accord with the principally Accepted Accounting Principles (GAAP). However, according to the aforesa id situation, TPCs accounting records have not been prepared in harmony with the GAAP standards.In order to bring the audit in compliance with the GAAS standards, the first action that should be taken is to provide the auditor complete mental freedom to undertake the audit process and individually obtain the information required to carry out the process. This can be done if the influence of auditors carnal knowledge is avoided. Another step which is important to be undertaken is that the auditors should be provided an opportunity to perform physical examination wherever possible. Otherwise the auditor will need to mention his inability to perform physical inspection in the report and reflect this fact in his final opinion to bring the audit in compliance with the GAAS standards. Also any corrections in TPCs accounts and financial recording should be made, where possible, so as to