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AC3560 Audit Practice

Published : 10-Oct,2021  |  Views : 10

Question:

A top ten firm of auditors has recently advertised for new staff and are recruiting Accounting and Finance undergraduates who will be graduating in June 2017.

Their advert states the following:

If you would like to apply for a training post with us, to commence in September 2017, please send us a letter consisting of the following sections:

a. Explain why you believe that you are suitable for this post. 

b. Describe and analyse the qualities that you believe that you will need as a trainee as you progress through your three years of training.

c. In a document entitled AUDIT 2020 A Focus on Change, published by Forbes Insights/KPMG, after surveying 151 finance professionals it was concluded that: ‘Technology is the factor that will have the greatest impact on the audit profession.’  

Critically evaluate this statement.

d. In the Introduction to International Standard on Quality Control 1, it states: ‘This International Standard on Quality Control (ISQC) deals with a firm’s responsibilities for its system of quality control for audits and reviews of financial statements, and other assurance and related services engagements.’  

Evaluate the importance of this Standard to professional firms.

Answer:

Dated 24 March 2017

Dear Mr. X,

MCV and Partners

Ref: Advertisement No. 3210

I am writing in reply to your advertisement no. 3210 on the newspaper XYZ for position of undergraduates in Finance and Accounts. I am enclosing/attaching herewith my CV for your consideration.

a) Reason for suitability of this post: 

As you see from my CV, I have impressive records and previous involvement in this area. I trust that my insight, aptitudes and skills that the position needs make me reasonable for this post. I can unquestionably complete the said part of your set of working responsibilities. I see myself as a submitted cooperative person, who additionally savours challenges and promptly accepts accountability and responsibility in an individual execution part where activity is imperative. The bookkeeping ability gave me a decent establishment to expand my career. I can incorporate regard and make a beneficial commitment to the organisation's development with specialized basics, which I have picked up amid my instructive vocation. My state of mind and disposition perfectly suit the way of the employment. In addition, I am anxious to enter in another workplace. I might want the chance to add to the effective operation of an outstanding organisation and to acquire progression through work execution.

Further, I have, for a long while, been itching to fill in as a bookkeeper for a rumoured review firm that grasps social changes and gives a tangible affair to its guests. My degree created scratch imaginative and hierarchical abilities, while the experience that I picked up from working at my venture has been the perfect readiness for a vocation in this field. I would savour the chance to be a piece of the group that takes a shot at the ideas of bookkeeping and reviewing.

In spite of the fact that I have not had the opportunity to pick up work involvement with a rumoured reviewing firm yet. I have as of now made abnormal state ideas that have been utilised by top review firm(s). At college, I was the topper among the profession. I have made and increased great comments in bunches of back and accounts ventures.

At the point when my mom was determined to have a genuine ailment a year ago, it was a traumatic and distressing time for the entire family. Despite the fact that I had not played any game since school, I chose agreeing to accept a run and raise cash to build attention to the illness. I prepared hard for various months and kept to a strict eating administration. I figured out how to raise about £5,000 for the philanthropy and completed the race in a period. I could never had envisioned that was conceivable. I am sharing this, as at any circumstance, I can deal with the things and circumstance.

I have an ability to create effective motivational and group building process. I was twice granted understudy of-the-year for my imaginative procedures and number of amusement ideas for inspiring understudies to meet and outperform extend due dates. In the event that contracted, I will bring my bookkeeping capacities for accomplishing increases to this position.

I have first-rate bookkeeping aptitudes and I trust I would be an advantage for the workplace. My ability set is by all accounts an impeccable match for what the organisation is searching for. Moreover, I appreciate working with individuals along with welcoming the chance to be a piece of your group. In this way, I trust that my quality with the business standards would make me a perfect match for this position.

b) Requirement of Qualities:

Bookkeeping has notoriety for being a dry, exhausting field for profoundly investigative individuals. This stems from the way of the work, which largely fixates on recording and observing organisation or customer money related exchanges and planning budgetary reports.

Therefore, following qualities would be required to become a good trainee in finance and accounts:

  • business mindfulness;
  • general all round business intrigue and information;
  • solid composed and verbal relational abilities;
  • self-inspiration and duty by keeping in mind the end goal to join working and contemplating;
  • great interpersonal and arrangement aptitudes;
  • capacity to speak with individuals from all foundations;
  • authoritative and time administration aptitudes;
  • systematic approach;
  • IT capability;
  • great numeracy abilities;
  • adaptability and versatility;
  • authority qualities and viable team working abilities;
  • solid investigative, critical thinking and precision abilities;
  • Affability and carefulness; (Lepistö, n.d.)
  • a proactive approach and aspiration;
  • Trustworthiness and trust

Apart from the above skills and qualities, some specific responsibilities would be required to deal with finance and accounts as a trainee:

  • planning money related articulations, strategies for success, analyses and spending plans for administration or customer reports;
  • frequently undertaking reviews, including the examination of the association's records, breaking down hazard, assessing the association's present works on researching any budgetary abnormalities and suggesting upgrades;
  • checking on, actualising and adjusting new and existing money related frameworks and controls;
  • delivering and breaking down yearly and month to month accounts;
  • giving standard monetary reports, as and when they are required;
  • overseeing use, credit, finance and ventures;
  • liaising with customers (people or organisations) or non-budgetary individuals from staff, giving money related data and counsel;
  • prompting supervisors on money related arrangement and control, for example, the expenses and advantages of a specific venture;
  • managing, and exhorting on expense issues, guaranteeing consistence with duty enactment;
  • educating customers on regions regarding business change, or managing indebtedness;
  • arranging business terms with related associations, for example, providers;
  • overseeing partners

From above skills requirement, following two qualities are utmost needs with the following reasons:

Time Management:

It has been observed that great time-administration and aptitudes go as an inseparable unit in with solid hierarchical capabilities. Moreover, a framework for overseeing workload is just successful on the off chance that we additionally know how to spending plan our time. As a bookkeeper, we would have to oversee contending needs and juggle bunch undertakings – while finishing everything on time. The capacity to work inside due dates and to persistently re-organize our schedule will benefit us. It inspires our manager and helps us to keep up a sound work.(Alzola, n.d.).

Communication:

Since regardless of where we work, what our employment involves, solid relational abilities are fantastically significant. Having the capacity to impart well in composing and in person will help us to land a position, fill in as a group with our partners, interface with customers and with time progress professionally. Regardless of whether we need to go to a corporate capacity or are just respecting another collaborator to the workplace, the capacity to state our self when meeting new individuals keeping in mind the end goal to set up gainful connections will work well for us.

c) Impact of technology on the audit profession:

Innovative advances are a game changer for the review. With the help of additional information, investigation are empowering inspectors to evaluate steadily expanding volumes of information. This is changing the way of review by empowering examiners to better distinguish budgetary announcing, misrepresentation and operational business dangers and tailor their approach to convey a more applicable review. (Dowling, n.d.).

Innovation oversees us the open way to convey progressively exhaustive testing, with enhanced concentration and review quality. These new abilities flag huge change for our calling. The mechanical advances made over the previous couple of years are making high performance registering and the capacity to get profitable experiences from customer information are more open to review groups. (Pizzini, n.d.).

The inside approach facilitated cloud registering and shabby information stockpiling, which have enhanced the accessibility of expanded computational ability that we can adequately coordinate into the review preparation. This empowers review groups to deliver bigger volumes of significant information than was already conceivable to bolster the review. (Elbardan, n.d.)

The mix of enormous information, progressed examination and representation of advancements are conveying review and business experiences that affect the arrangement, execution and conveying of the review. For case, rather than testing an example of income exchanges to evaluate the fittingness of income acknowledgment, an examiner can now dissect all income. Furthermore, contra-income exchanges to distinguish irregularities over the business or peculiarities with particular clients or specialty units. (Alles, n.d.).

This permits us to distinguish exchanges that fall outside the purview for further examination and testing. We can arrange movement in view of its properties, recognise dangers and penetrate down to inspect the fundamental exchanges and the points of interest that assistance to clarify why we see something that strays from the standard.

In this manner, our testing techniques are focused on extending our review that confirm over a finish populace of exchanges. This builds the nature of our review while permitting us to share experiences that are more important with our customers. (Kotb, n.d.).

Because of these improvements, we are ready to be more forward-looking much prior in the review procedure. Truly, investigations were primarily used to convey out year-end substantive systems.

In those cases, to approve the record adjust, we would acquire the fundamental because of these advancements, we are ready to be more forward-looking much prior in the review procedure. Generally, investigations were used for the most part to convey out year-end substantive systems.

In those cases, to approve the record adjust, we would acquire the basic and IT) helps us to better survey the hazard profile of that portfolio. This makes us more compelling by empowering us to centre our assets on high-hazard things and those where greater judgment is required. (Abdul-Manaf, n.d.)

The current monetary atmosphere proceeds to underscore the part of free examiners in the money related markets, with expanding desires of the degree and estimation of the review. Innovation advancement is transformation, which affects the review and giving us an open door to adjust the review to the desires of the controllers, speculators and customers. Therefore, in future also this technology will be a game changer in the auditing and accounting profession.

d) Importance of ISQC 1 to professional firms:

Extent of ISQC 1:

The association's duties regarding its arrangement of value control for reviews and surveys of money related articulations, and other affirmation and related administrations engagements.

Expert of this ISQC "Para 5-1":

This applies to all organisations of expert bookkeepers in regard of reviews and surveys of money related explanations, and other affirmation and related administrations engagements

Compelling date of ISQC 1: 17 June 2016

Target of ISQC 1 "Para 11"

  • To set up and keep up an arrangement of value control to furnish with sensible affirmation that
  • The firm and its work force agree to proficient gauges and appropriate legitimate and administrative prerequisites; and Reports issued by the firm or engagement accomplices are fitting in the conditions.

Definitions "Para 12"

Prerequisites of ISQC 1 "Para 13-59"

  • Faculty in charge of setting up and keeping up the association's arrangement of value control might have comprehension of this ISQC 1.
  • Agree to all necessity of this ISQC 1 unless not relevant.
  • Extra necessity may should be built up notwithstanding ISQC 1 for satisfaction of target of ISQC 1.

Components of a System of Quality Control

Administration Responsibilities for Quality inside the Firm

Company's CEO (or comparable) or, if proper, the association's overseeing leading body of accomplices (or proportionate) might accept extreme accountability for the association's arrangement of value control.

Company's CEO or overseeing leading group of accomplices should have adequate and proper experience and capacity, and the vital expert, to accept that accountability.

Significant Ethical Requirements
  • Firm and its faculty should consent to significant moral prerequisites.

Autonomy

  • Firm should impart its autonomy prerequisites to its work force and, where relevant, others subject to them.
  • Recognize and assess conditions and connections that make dangers to freedom, and to make suitable move.
  • Engagement accomplice should give data about the customer and engagement to assess effect on freedom prerequisite.
  • Work force should instantly inform the firm of conditions and connections that make a danger to autonomy

A comprehension of the plan and aim of ISQC 1 will help firms of smaller size to apply ISQC 1 in an important what's more, practical way. Among other vital elements, there are various ideas installed in ISQC 1 that are valuable to accomplishing proportionate application, including that:

  • Firms require compliances to those prerequisites that are significant to the administrations gave.
  • Firms can practice fitting judgment in executing an arrangement of value control, for instance, in choosing how formal certain procedures should be to conform to the prerequisites of ISQC 1 or in documentation of the framework.
  • Firms can attract on outer assets to meet a portion of the prerequisites of ISQC 1.

Along these lines, the goal of actualizing an arrangement of value control is the same for all organizations paying little respect to their nature or size. In any case, this does not imply that all organizations need to outline and execute precisely the same particular arrangements and techniques, or approaches and methodology at a similar level of detail, to accomplish the target and necessities of ISQC 1.

Conclusion:

From the above discussion and analysis, I conclude my letter and now I am very excited to learn more about this opportunity and share how I will be a great fit for your organization.

Thanks and Regards

ABC

References:

Abdul-Manaf, K.B., Amran, N.A. and Ishak, R., 2016. Audit Size and Earnings Value Relevance in Malaysia. International Information Institute (Tokyo). Information, 19(7A), p.2655.

Alles, M.G., 2015. Drivers of the use and facilitators and obstacles of the evolution of big data by the audit profession. Accounting Horizons, 29(2), pp.439-449.

Alzola, M., 2016. Beware of the watchdog: Rethinking the normative justification of gatekeeper liability. Journal of Business Ethics, pp.1-17.

Ang, S.Y., 2013. Adoption of clarified international standard of auditing (ISAs) and international standard of quality control (ISQC) in small and medium practice (SMP) in Malaysia/Ang Soon Yong (Doctoral dissertation, University of Malaya).

Anis, A., 2014. Auditors' perceptions of audit firm rotation impact on audit quality in Egypt.

Benjamin, M., Sharma, S., Tawiah, V.K., Chandok, A. and John, M., 2014. Analytical Study of Management Skills for Peak Performance in Organizations. International Journal of Innovative Research and Development|| ISSN 2278-0211, 3(10).

Brown-Liburd, H., Issa, H. and Lombardi, D., 2015. Behavioral implications of Big Data's impact on audit judgment and decision making and future research directions. Accounting Horizons, 29(2), pp.451-468.

Cernusca, L. and Balaciu, D.E., 2015. The Perception of the Accounting Students on the Image of the Accountant and the Accounting Profession. Journal of Economics and Business Research, 21(1), pp.7-24.

Dowling, C., 2014. A Big 4 firm's use of information technology to control the audit process: How an audit support system is changing auditor behavior. Contemporary Accounting Research, 31(1), pp.230-252.

Elbardan, H., Ali, M. and Ghoneim, A., 2015. The dilemma of internal audit function adaptation: The impact of ERP and corporate governance pressures. Journal of Enterprise Information Management, 28(1), pp.93-106.

Kotb, A., Sangster, A. and Henderson, D., 2014. E-business internal audit: the elephant is still in the room!. Journal of Applied Accounting Research, 15(1), pp.43-63.

Kwon, S.Y., Lim, Y. and Simnett, R., 2014. The effect of mandatory audit firm rotation on audit quality and audit fees: Empirical evidence from the Korean audit market. Auditing: A Journal of Practice & Theory, 33(4), pp.167-196.

Lepistö, L., Järvenpää, M., Ihantola, E.M. and Tuuri, I., 2016. The Tasks and Characteristics of Management Accountants: Insights from Finnish Recruitment Processes. Nordic Journal of Business, 65.

Nguyen, L.A.T., 2016. Accountants' perceptions of financial reporting quality in Vietnam and their ethical sensitivity to earnings management (Doctoral dissertation, RMIT University).

Pizzini, M., Lin, S. and Ziegenfuss, D.E., 2014. The impact of internal audit function quality and contribution on audit delay. Auditing: A Journal of Practice & Theory, 34(1), pp.25-58.

Sun, Y., Gergen, E., Avila, M. and Green, M., 2016. Leadership and job satisfaction: Implications for leaders of accountants. American Journal of Industrial and Business Management, 6(03), p.268.

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