This chapter provides users with information about the core concept of the report, such as what the main purpose of this study is. This chapter contains information about the companies, such as the historical background of the company and the profile of the company. The internship program is a compulsory requirement for students graduating from the BBA program of the Sonargaon University (SU) Faculty of Business Administration.
The broad objective of the study is to know about the Independent Auditor's Report of Chartered Accountants (CA) firm, based on my internship experience gathered from K M Hasan & Co. Secondary data was also collected from the various publications of The Institute of Chartered Accountants of Bangladesh (ICAB). Other information was collected from the various corresponding files of the firm and various relevant books, mainly Bangladesh Standards on Auditing (BSA).
The independent auditor's report is a confidential report or objection to the firm, so it is very difficult to present the exact format of the firm's annual audit report. Because my assignment time was not that long, it was not possible for me to know everything about the firm's annual audit procedures. In simple terms, it expresses the opinion that financial statements give a true and fair view of the state of affairs.
The wider horizon of the company is now visible to all who take it with their professional interests.
In case of engagement with new Client Company
Hasan & Co., I try to focus on the engagement procedures through which K.M & Hasan & Co. After receiving proposal letters from various audit firms, the Client Company then selects the one that is favorable to them and appoints the audit firm for the purpose of the audit.
In case of engagement with existing Client Company
In case of directly appointed by the Client Company
Necessary documents for Client Company audit
- Identify firm’s overall goals
- Irregularities and other matters
- Efficiency
- Gather & evaluate initial information
- Understand the operation of Client Company’s
- Identify client expectation
The audit team should design the audit to provide reasonable assurance about the detection of material misstatements. Existence or Occurrence: An entity's assets or liabilities exist on a specific date and recorded transactions occurred during a specific period. Completeness: All transactions and accounts that should be presented in the financial statements are thus included.
Rights and Liabilities: Assets are the rights of the entity and liabilities are the obligations of the entity at a given date. Presentations and information: The special components of the accounts are correctly classified, described and disclosed. The audit team should design audit procedures that meet the overall objectives discussed above in the most effective manner.
It has long been a tradition of K.M. HASAN & CO. to provide greater value to the client's businesses as an integral part of audits. This strategy has been adopted by K.M. Hasan & CO. to differentiate our approach from that of other companies. Delivering added value as an integral part of an audit and effectively communicating the added value information to top management, directors, etc. is a key factor in building and maintaining a healthy client-company relationship.
Proper planning and design of an audit depends on a good understanding of the operation of the Client Company. So, after engagement by a client company, we, the members of an audit team, use a variety of sources to gain insight into the operation of the client company. After consultation with the client, we try to understand the internal control structure of the client's activities as much as possible, because understanding the internal control structure of the client helps us determine the extent of our control risk.
As an external auditor, we must identify the customer's expectations and design and perform the audit to meet the customer's expectations.
Asses general risks
- Audit risk
- Consider of fraud and error
- Assessment of detection risk
- Assessment of inherent risk and control risk
Based on the assessment of inherent and control risks, we design substantive procedures to reduce the risk of detection to an acceptably low level. Fraud risk factors identified as present are addressed in the design of data testing procedures. In assessing inherent risk and control risk, we generally consider how the financial statements could be materially misstated due to fraud or error.
In considering the risk of material misstatement due to fraud, the auditor should consider whether fraud risk factors indicate the possibility of either fraudulent financial reporting or misappropriation of assets.
Development of effective and efficient audit plan/ work program
Evaluate and communication audit result
External report/auditor’s report Basic elements
Matter that do not affect the auditor’s opinion
The addition of such an Emphasis of Matter paragraph does not affect the auditor's opinion. The paragraph is preferably included after the opinion paragraph and generally refers to the fact that the auditor's opinion is not qualified in this regard. The nature of the circumstances giving rise to a qualified opinion will generally fall into one of two categories. a) When there is an uncertainty that prevents the auditors from forming an opinion on a matter (uncertainty); or.
The auditor declares in a disclaimer that he is unable to form a conclusion as to whether the annual accounts give a true and fair view. In a negative opinion, the auditor states that, in his opinion, the accounts do not give a true and fair view.
Internal report/management letter
Purpose of management letter
Content
Where this has not been dealt with effectively, the auditors must inquire why appropriate action has not been taken.
Management response
Basic elements of the management letter
In this report, I have tried my level best to cover the detailed audit procedure followed by K.M.
General Definition of audit process and procedure
Audit Process
Auditing procedure
Audit Process and Procedures in Bangladesh
Reason
- It is a requirement of BSA
- It is the key to successful auditing and would be part of the APM approach even if there was no requirement for it in BSA
- Planning
- Collection of audit evidence
- General
- Management letter
- Controlling and recording
- Review and opinion
- Conclusion
But the account of the clients we look after can be interim or annual. 34; Information is important if its omission or misstatement could influence the economic decision of users made on the basis of financial statements. Materiality depends on the size of the item or error, assessed in the particular circumstances of its omission or misstatement.
However, risk in particular is at the heart of the audit approach set out in the BSA. Therefore SAMPLING methods are used to verify transactions for better performance. The auditor must make sure that he can rely on the records and business books that are the basis for the preparation of financial statements.
The accountants must properly assess the client's internal control, accounting systems and books. To measure the effectiveness and efficiency of the internal control system, auditors conduct tests on the system by searching. The auditor's experience with respect to the reliability of the client's management and personnel and of its records;
The major impact of the amendment to Bangladesh Standards on Auditing (BSA) is in the approach to risk. It is also influenced by the business risks the company faces and an assessment of management integrity. Information is material if its omission or misinformation could affect the financial decisions that users make on the basis of the financial statements.
Materiality depends on the size of the item or error assessed under the particular circumstances of its omission or misrepresentation. It is one of the factors that influence the nature and extent of the detail tests. APM provides some checklists that can be used to review the overall performance of the client.
The first task of the auditor is to get answers about the checklist. So, all the transactions, asset value of the company cannot be monitored by the auditor.
