Auditing for Corporate Regulatory Authority- myassignmenthelp

Question: Discuss about the Auditing for Corporate Regulatory Authority. Answer: Regulation of auditing profession Audit regulatory bodies Accounting and Corporate Regulatory Authority (ACRA) registers the public accountants, publishes information and monitors their work. The audit administration of ACRA is administered under Accountants Act by Public Accountants Oversight Committee (PAOC) (Schultz 2017). Regulators objective and role Conducts the training and outreach the sessions for the company directors, international partners, corporate service providers, ACRA staffs and aspiring owners of the business Enhances and reviews business processes of ACRA and the standard of quality services Responsible for all the budgetary decision of ACRA, financial reporting and accounting process (Yee et al. 2017). Drives efforts for combating financing and money laundering of the terrorism under the purview of ACRA and regulates the sectors of corporate service provider. Oversees the corporate performance and strategic planning in the statistical research, planning of business community, planning efforts and enterprise risk management. Auditors independence, auditing process and competency Independence The engagement partner must form the conclusion on the compliance with regard to the requirement of independence that is applicable to the engagement of audit. Therefore, the audit partner shall obtain the relevant information from the company and network the firms for evaluating and identifying the circumstances and the threats that may create threats on independence. Further, it shall evaluate the information on the identified breaches with regard to the independence procedures and policies of the company and shall determine whether they generate any threat regarding the independence of the audit engagement (Kwon, Lim and Simnett 2014). Competency While considering the capabilities and competencies that is expected from whole audit engagement team, the partner must take into consideration the practical experience and understanding of the audit engagement of the similar complexity and standards through the proper participation and training. Further, the technical experts including the expertise with the relevant technology of information and the specialised sector of auditing or accounting must be taken into consideration. Various other things required to be taken into consideration are the professional judgement, knowledge of the clients industries and understanding of the quality control procedures and policies of the clients quality control (Kusnadi et al. 2016). Auditing process Auditing process focuses on major areas of the risk on the basis of the operational characteristics of the company and the performance profile. The auditing professionals are trained for close look at every aspects of the financial reporting for isolating the risk in better way. Further, the auditors work is performed as per the requirements of Singapore Standards on Auditing (SSAs). The auditing of the financial statements delivers an assurance level for the quality and reliability. Users for the financial statements involve the lenders, bankers, shareholders, customers and suppliers of the company (Krishnan, Krishnan and Song 2016). Corporate governance The Corporate Governance Council conducted the comprehensive review of code and after that they submitted the recommendations to the MAS on November 22, 2011. Then MAS issued the revised code of the corporate governance on 2nd May 2011. However, the code of corporate governance 2012 replaces and supersedes the code that was issued on July 2005 and the code was in effect from 1st November 2012. Efficiency (utilization of resources) v/s equity (fairness) Efficiency is generally related to how the economy allocates the scarce resources for meeting the wants and needs of the consumers whereas the equity is concerned about resources distribution and is linked with the concepts of social justice and fairness. The main goal is to recognize the circumstances under which the efficiency and equity may not be traded off against one another. Political, socio-cultural and economic inequalities generate the differences among the life chances and perpetuating them over the generations. Therefore, for prospering, the society shall generate the the incentives for vast majority of population to innovate and invest. Each of the society shall decide on the relative weight that can be ascribed to every principle of the equity and for efficient expansion of the production and socio-economical development. Areas of the audit profession Auditing standards development The Institute of the Singapore Chartered Accountants (ISCA) is national accountancy body for Singapore. The Singapore Standards on Auditing (SSAs) were written with regard to the audit of the financial statement by the independent auditor. Auditors qualification To get registered under the ACRA, the person shall have The prescribed qualification Prescribed experience in audit Prescribed amount for the continuing professional education Membership under the Institute of Singapore Chartered Accountants Audit exempt companies The companies for which the annual turnover does not exceed S$ 5 million are exempt under audit. Ethics and quality considerations Throughout the auditing engagement, the auditing partner must remain alert through making the enquiries and observation as required for the evidence of the non-compliance with regard to the relevant requirements of ethics by the members of engagement team (Abbott et al. 2016). Non-audit fees Non-audit fees are paid for the services related to tax compliance and tax services, legal services, valuation services and human resources services. Audit firm rotation or partners rotation Audit firms as well as the audit partners are required to be replaced in every 5 year. Directors roles and responsibilities The directors are charged with the management of the business of the company and making the operational and strategic decisions. Expectation gap Expectation gap is crucial as wider the unfulfilled expectation from society, lower is the earning potential, prestige and credibility with the auditors work (Yee et al. 2017). Effectiveness of the regulation for assuring the audit quality To maintain the quality of audit the auditor shall maintain and follow the regulatory requirements issued by ACRA and ISCA. Transparency reporting Transparency report is annually published and includes the detailed disclosures of the legal structure, quality control system and governance employed by the company under the audit and assurance practice. These objectives are achieved as far as possible. However, in case of the circumstances, where these are not achieved is disclosed through notes. Limitation of audit regulation The main limitation of the audit regulation is that the regulations are not applicable to all sizes of firms and not relevant for all the firms. Therefore, it will not be possible to compare the firms if regulation is applicable to one and not applicable to another (Kusnadi et al. 2016). Cost of audit regulation Audit regulation cost was amounted to S$ 5 million. Reference Abbott, L.J., Daugherty, B., Parker, S. and Peters, G.F., 2016. Internal audit quality and financial reporting quality: The joint importance of independence and competence.Journal of Accounting Research,54(1), pp.3-40. Krishnan, J., Krishnan, J. and Song, H., 2016. PCAOB international inspections and audit quality.The Accounting Review. Kusnadi, Y., Leong, K.S., Suwardy, T. and Wang, J., 2016. Audit committees and financial reporting quality in Singapore.Journal of Business Ethics,139(1), pp.197-214. Kusnadi, Y., Leong, K.S., Suwardy, T. and Wang, J., 2016. Audit committees and financial reporting quality in Singapore.Journal of Business Ethics,139(1), pp.197-214. 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. Schultz, W.L., 2017.PCAOB international inspections, audit profession development, and audit quality(Doctoral dissertation, Queen's University (Canada)). Yee, C.S., Sujan, A., James, K. and Leung, J.K., 2017. Perceptions of Singaporean internal audit customers regarding the role and effectiveness of internal audit.Asian Journal of Business and Accounting,1(2), pp.147-174. Yee, C.S., Sujan, A., James, K. and Leung, J.K., 2017. Perceptions of Singaporean internal audit customers regarding the role and effectiveness of internal audit.Asian Journal of Business and Accounting,1(2), pp.147-174.