Audit and assurance Essay Example | Topics and Well Written Essays - 1500 words

Audit and assurance - Essay ExampleLinked in to this is the growing intuitive feeling that many firms of auditors are unable to make objective judgments because they are either too close to the clients that they are auditing or they get close to them during recurring audits of the uniform clients. This is the principal(prenominal) area where an auditors independence is brought under question. The basic idea of audit is to bring in an independent tax assessor of the financial contestations the assessor i.e. the auditor should be honest while giving out his conclusion on the financial statements. The auditor pick outs a report explaining the audit process and gives his legal opinion as to the truth and fairness of the financial statements i.e. whether they are prepared in accordance with the relevant legal and accounting standards. There are many unalike types of assurance engagementsAn auditor usually gives out two types of assurances, Reasonable or Limited Assurance. A reasona ble assurance is of high level while a peculiar(a) assurance is a moderate level assurance. When giving out a reasonable assurance, the auditor gives out a positive report (means the statement given out would be a positive one as opposed to a normative statement given out in limited assurance).Many companies get their financial statements audited by different audit firms, along with these external audits, companies also assign other assurance services to the existing auditor, this issue has caused a bit of concern over the recent years. The independence of the auditor is questioned when he takes up such(prenominal) assignments along with the external audit assignment. To avoid such situation, the auditor can perform certain strict procedures while performing the external audit along with other assurance servicesThe treasury choice committee in May 2009 published a report to address the issue of increasing investors confidence in a firm, in this report, the main aim of