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may I know what is the role of external auditor in prevention and detection of fraud?
because it supposed should be internal auditor role’s.
and may I know what problem will occur if the accepting of audit appointment and removal from offices are controlled by management? how to solve it?thanks sir
Auditors give reasonable assurance that the FS are froo from material misstatement whether caused by fraud or error.
They might not find the misstatement because their tests use sampling and also fraudsters hide their thefts.
All appointments and removal of auditors have to be approved by shareholders. Management might recommend the changes but members have to approve. Audit committees comprising non-executive directors make the recommendations more independent. There is otherwise a danger that management recommends that poor auditors are appointed in the place of good ones.
OK is that means if the audit appointment and removal are controlled by management, it will undermine the audit independence because the management may manipulate the auditor to do whatever they want as they can threat the auditor if u don’t do as to what I said, you will be saked. Besides, the auditor will not be objectivity when they carry out this audit because they are some factors which will influence the auditor judgement?
Am I right?
and may I know normally who will issue the engagement letter and the appointment letter to the auditors?
Thanks sir
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