The Government Audit Standards Essay Example

The government audit in its way deserves to be free from all may be personal or from other government or private organizations. The audit must also appear to be independent of any impairment to it. The government audit has four standards that include; independence, competence, professional judgment, and quality control and assurance are some of the government standards of auditing. In my essay below am going to discuss all the components that are in the government audit standards mentioned above.

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Firstly, independence in audit control is a situation where the audit process is free from interference from outside parties. The government needs to carry out an independent audit because it helps to generate an accurate audit report whose findings can be relied upon by the government and other stakeholders whenever necessary. The audit should be free external impairments that may harm the outcome of the audit. Example of impairments includes; personal impairment, organizational and external impairments to audit. The auditors and auditing firms that have a duty of carrying out an audit for respective companies should ensure that the carry out a review that is independent so that their findings, judgments, conclusions, and recommendations can be considered impartial and correct by the parties that seek understand the results. The risk to independence by non-audit services, for example, familiarity can adversely affect the audit in a situation where the auditor and the audit company know each other, for example, the Tesco case where the company paid more NAS in exchange for high non-audit fees (Cooper, Coram, Leung & Richardson, 2015). The need to have independence is very crucial in ensuring that the reports that are available to third parties who are interested in the information are accurate and hold information that will also benefit the audit client.

Secondly, professional judgment is a process of practicing reasonable care and professional interest and showing professional concern that is as per the norms and professional rules and principles that have been put in place to control how people carry out their duties at their workstations. The auditor must be able to question his mind, his decisions and the evidence that is available to him. The auditor is required to apply his knowledge, understanding, and skills to make sure that they objectively carry out an assessment of the evidence and carry out an objective evaluation of the evidence to generate consistent findings (Farooq & De Villiers, 2017). On the other hand, professional judgment may also involve collaboration and working with other personnel who have an interest in the audit.

Auditors can employ professional judgment in so many ways, for example, ensuring an independent audit, maintaining credibility, highlighting the scope of work, hiring highly qualified personnel, carrying out an appropriate assessment and evaluation of the work and ensure that the work being carried out is of the required quality. Professional judgment is significant because it helps an auditor determine the necessary level of understanding that is required, the subject assignment and the circumstance surrounding the entire task. While professional judgment is a requirement of all the auditors, it does not apply in some instances, for example, a professional judgment does not eliminate all the risks and weaknesses that are associated with audits but tries to mitigate and reduce the intensity of the impact that would have occurred if a professional judgment was not practiced (Knechel & Salterio, 2016). An example of a professional judgment situation is where the auditor who has a lot of experience working with a specific audit client is not compromised because of their familiarity.

Thirdly, competence means that the workers that are mandated with performing a particular task are qualified enough to handle the audit assignment. An organization that has an intention of carrying out an audit should look out for auditors who have the relevant professional skills, expertise and academic qualifications that will enable them to perform the requirement of the auditor understand the scope of the audit assignment. The audit organizations are also required to carry out frequent training for their employees so that they can improve their skills and know-how in their field and are competent enough to handle huge or complicated audit assignments. The evaluation of the workforce to determine their qualifications dramatically depends on the nature of the organization, the size, structure, and its main work. Competence is a combination of educational qualifications and experience; an individual cannot be said to be competent if he lacks either of the two. For example, an audit company that specializes in financial audits should ensure that they have in their workforce employees that know generally accepted accounting principles. Competent companies enjoy more customers due to the belief that qualified employees can deliver work that is true and lacks any faults whatsoever.

Elements of competency are the components of the unit of competency. They describe what an employee who works in a particular role must be able to do. The elements are the actions or outcomes that can be demonstrated and assessed. Requirements for Continuing Professional Education from January 1, 2001 in addition to the three fiscal years preceding this period, the Regular AICPA members will be required to complete 120 hours or its equivalent of what is referred to as the continuing professional education.

Fourthly, quality control and assurance is making sure that all the auditing process and principle that have been put in place are followed while carrying out the audit process. It also means that the organization has adopted and is following the available audit policies. The quality control and assurance of an organization depend on several factors, for example, the size of the organization, nature of the work they perform and the benefits of the audit. An organization is required to carry out an external quality control every three years to ensure that they are conforming to the regulations that are put in place to control the quality of work that they do (Messier, 2016). A quality control and assurance assessment and evaluation may be carried out in an organization to make sure that the audit firm has employed workers who can deliver high-quality work that meets or exceeds the required standards. Additionally, there are various requires that may call for peer review and they include, litigation, lack of internal expertise, miscellaneous issues and vague recommendations.

Conclusion

In conclusion, the government audit standards are essential to any successful audit because, for example, an organization that fails to integrate independence of auditors of professional judgment may find out that they do not qualify and true findings that can be relied upon hence losing more audit clients to more qualified audit firms. For an audit assignment to be effective and efficient, it should ensure that it embraces all the standards discussed above.

References

Cooper, B. J., Coram, P., Leung, P., & Richardson, P. (2015). Modern auditing et assurance services: Philomena Leung. Milton: Wiley.

Farooq, M. B., & De Villiers, C. (2017). The market for sustainability assurance services: A comprehensive literature review and future avenues for research. Pacific Accounting Review, 29(1), 79-106.

Knechel, W. R., & Salterio, S. E. (2016). Auditing: Assurance and risk. Routledge. Bottom of Form

Messier, W. J. (2016). Auditing & assurance services: A systematic approach. Place of publication not identified: Mcgraw-Hill Education.