The environmental audit is the management tool for the environment for the purposes of measuring the effects of the activities on the environment as has been set as against the criteria or the standards. This mainly depends upon the various different standards and the areas on which the audit. Based on this, the enviroThe environmental audit is the management tool for the environment for the purposes of measuring the effects of the activities on the environment as has been set as against the criteria or the standards. This mainly depends upon the various different standards and the areas on which the audit. Based on this, the environmental audit is chosen. There are organisations that recognise the importance of the various matters of the environment and also accept the fact that the environmental audit that has bene conducted shall be reviewed by the parties that are interested in that research foundation or the research firm. This audit helps in the investigation, better understanding and in the identification of the audit.
There are a number of different human activities that help in improving and in reduction of the adverse effects of the activities on to the environment. As an environmental auditor, the effects of the organization’s environment is to determine the adequacy of the maintenance of the various documents that pertains to the environment (Soas, 2016).
An audit of the environment involves various practices and procedures and the collection, collation, analysis, interpretation and the presentation of the information that is used for the purposes of assessing the performance that has been set as against the requirements or the targets that are related with some of the issues that are specific in nature. Further, this is concerned with the complying with the environmental legislations and the corporate policies and also the measurement of the performance as against the requirements of the standard of the environmental management system.
This audit would comprise of a systematic, periodic and a well-documented and the objectives aspects of the environmental auditing that is very basic effectiveness of the audit. This is considered to be fast and the most recent tool when it comes to the corporate environmental assessment and the management toolkit. This is the requirement that repeats the audit and also ensures that there is an ongoing commitment and a systematic process for the process of improving the performance of the environment. The scope of the audit itself repeats and becomes more comprehensive when it comes to experience and also expertise in the accrued or as the new issues or the emergence of the new legislations.
When it comes to the assessment, appraisal along with monitoring and reviewing them, then it can be used instead of an audit. Audit helps in the detailed verification with the periodic cycle that takes place between the audits. There is a one off event which is carried out less in detail and with a lesser direct checking of the data.
An auditor has to keep in mind that there are many of the environmental reviews that provides the base of the current effects on the environment or the impacts of the relevant legislations on to the environment along with a statement of existence of the environmental performance. These are the reviews that provides and helps in the management of an action plan. They could become a part of an environmental system of management that helps in the implementation of the plans. When these have been undertaken, then these are considered to be the first in the series of the periodic audits of an environment and are often called the “Baseline Environmental Audit”.
An auditor must ensure that he draws up the required methodologies for the research firm that is able to define its own system which depends upon the size, activities and the corporate culture of the firm. The scope and the style of the audit would vary but would generally include the following stages or the activities:
There is an Ems tool that has bene designed so as to enable the organization to target, achieve and demonstrate the continuous improvement in the performance of the environment. This is one of the most integrated management processes with a various different number of the stages that includes an environmental audit. There are a number of different standards that have been issued for the purposes of the research firm. The standards includes the British Standard BS7750 (BS11992), the European Eco-Management and Audit Scheme for Industry (CEC, 1993) and the DoE Eco-Management and Audit Scheme for UK Local Authorities (DoE,1995).
There are a number of companies that have set up some of the internal environmental standards that could be applied across the world. These are stricter than the local legislations (SNH, 2016).
For the purposes of an audit, the nature, extent and the timing of the resources has to be looked into such as the following:
Inherent risk is defined as the risk of the material misstatement in the financial statement that could take place due to an error or an omission. This could result in the failure of the controls. These are the factors that could cause the misstatement due to the absence of the lapse of the various controls that have been considered separately when it comes to the assessment of the risk of the controls.
This risk is generally considered to be high wherein there is a high degree of judgement and the estimation included or wherein there are transactions involved are very complex. In order to illustrate, in case, the inherent risk is high in the case of the financial institutions that have been formed newly, and the same has a significant trade that it deals in and is exposed to a very complex derivative instruments that may have to be considered when it comes to an audit.
This is the risk that the financial statement could be misstated due to the absence of the failure in the operations of all the relevant controls in the entity.
There are organisations that have some adequate internal controls when it comes to prevention and detection of the frauds and errors. The control risk is considered to be high when the entity for which the audit is being undertaken does not have the adequate amount of the internal controls.
Hence, an auditor is duty bound to assess the control risk.
The detection risk is the risk that the auditor may not be able to detect the material misstatement in the financial statements.
As has been stated in the question, the entity has an increased amount of risk exposed to it and hence, has to apply some of the procedures that could result in a material misstatement. An audit could easily be undertaken and is capable of not detect the errors or the frauds due to the presence of the inherent limitations of the audit. And for this, sampling could be used for some of the selected transactions.
The detection risk can be reduced by the help of extending the sampling procedure to the transactions. In case, there is an inappropriate application of the audit procedures then the material misstatements could remain undetected by the auditor. There is some detection risk that is always present when it comes to audit (Pcaobus, 2016).
The audit risk could be reduced by the auditor by experiencing his judgement and applying his knowledge that he has gained. He has to exercise some reasonable care when it comes to auditing.
As an auditor is duty bound to first undertake the examination of all the inherent and the control risks that pertain to the audit and also gain an understanding of the entity and its environment. He has to list down the procedures that he would undertake when it comes to reducing these risks when he believes that the audit risk is high. In case, he feels that the audit risk cannot be reduced even if he exercises his judgement, professional and reasonable care, then he must refuse to accept the audit engagement (Accounting simplified, 2016).
The ISA 210 helps in setting down the preconditions for the audit which follows:
The use of the information by the management of an acceptable financial reporting framework when it comes to the preparation of the financial statements and there is an agreement with the management and the people that have bene charged with governance when it comes to conduct of an audit. An auditor helps in the determination of the acceptability of the framework of the financial reporting when it comes to the preparation of the financial statements. This goes on to include as to whether there are laws, rules and regulations that prescribes the application of the financial reporting framework and this considers the purpose of the financial statements and the nature of the reporting entity.
Further, the auditor must obtain an agreement from the management wherein the management acknowledges the fact that it is it who is responsible for the preparation of the financial statement as per the financial reporting framework. Plus, when it comes to the internal controls, it is the sole responsibility of the management so that the financial statements are free from the material misstatement due to error or fraud. Further, for the purposes of providing the financial statement, the auditor must provide all the information that is necessary for the audit.
In case, the management imposes a limitation on the scope of the work that is being performed by the auditor, then he must decline the audit engagement if there are limitations that could result in disclaim of the opinion on the financial statements (ACCA global, 2016).
Before accepting the engagement, the auditor must agree to the new engagement. There are some of the good information sources that includes the information from the previous auditor and others. Confirmation must be obtained from the other professionals that deal with the company and other such federal regulators. The information must be sought from the online sources as well. Based on the information that has been gathered, if the auditor thinks that the risk is high, and he is not able to reduce the same, then he must reject the acceptance of the offer (Small business chron, 2016).
The duties must be assigned significantly and must include the following job duties:
When it comes to the research and development environment, an auditor has to design and develop the verification activities that provides him confidence with respect of the following:
An auditor must never sign any declaration without checking the facts of the case. He must always extend his audit procedures to check and ensure that there is no foul play. The same goes in this case too. If the above goes fine and he is of the view that all the financial statements and other statements and information conform what they represent, only then should ne sign otherwise not.
Patents are quite easier to locate when it comes to being compared with the trademarks or the trade dress.
The following have to be undertaken when it comes to the audit of patents:
When their validity has been examined, then it has to be registered. In case, any problem is discovered during the course of examination of the patents, then the patent has to be re-issued.
An auditor is duty bound to ensure that the patent has not been misused.
This could take place in an anti-trust sense wherein the patent has been set up using the unlawful arrangement of typing. This could take place when the patent number has been placed on to the wrong product or when the product has been marked wrongly with the patent number. There could be a misuse of the patent that generally arises due to the defences to an action for the infringement of the patent. The misuse of the patent could be used so as to preclude the enforcement of the patent that is otherwise valid (Lottfischer, 2016).
The feed based technology is the technology wherein the company makes feed from the waste to feed the fishes or the cattle’s.
There have been many of the companies that have got their patents registered by preparing the feed based technology (Phys news, 2016).
But just because, the entity has asserted in a prospectus that the patent values were predicated on BSF Ltd. having exclusive control over the bacteria-based feeds that does not mean that the entity has an exclusive right over the technology of the bacteria based feed.
An auditor must extend his substantitative and analytical procedures to determine the validity of the above statement. If he is sure that the company has the right, only then should he sign the statement to be true and fair. In order to determine the validity of the statement, he will have to examine the books of accounts of the entity.
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