Why Should You Consider an Internal Control Review?

You might have a clean audit opinion but material weakness in your internal control function… It’s better to check it out.

What is a Clean Audit Opinion?

The opinion of a company’s auditors that its financial statements are fairly presented in accordance with generally accepted accounting principles.

What is Internal Control?

Internal control is a process put in place by a company’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives.

Is a Clean Audit Opinion a Guarantee of Error-free Financial Statements?

When an auditor issues a clean opinion on the company’s financial statements, this is a representation to the public that the auditor has followed applicable auditing and associated professional standards to allow the auditor to conclude with reasonable assurance that the financial statements are fairly presented in line with Financial Reporting Standards in all material respects.

However, a clean audit opinion is not a guarantee of error-free financial statements, it is a conclusion by an auditor, using procedures and professional judgment that are reasonable, that the financial statements are Read more

Posted on November 28, 2017 by Lisa Byrne

Proper Books of Account

The requirement that a company keep proper books of account is contained in section 282 of the Companies Act 2014. 

Section 282 provides that every company shall cause to be kept adequate accounting records, whether in the form of documents or otherwise that –

  • correctly record and explain the transactions of the company,
  • enable, at any time, the assets, liabilities, financial position and profit and loss of the company to be determined with reasonable accuracy,
  • enable the directors to ensure that any financial statements of the company required to be prepared under section 290 or 293, and any directors report required to be prepared under section 325, comply with the requirements of the Companies Act, and where applicable, Article 4 of the IAS Regulation: and
  • enable those financial statements of the company so prepared to be audited.

Read more

Posted on November 15, 2017 by Paul Leonard

Ethical issues facing auditors – part 3/3

The Ethical Standard for Auditors, issued by the Irish Auditing & Accounting Supervisory Authority set out the basic principles that must be applied when carrying out an audit.

All audit firms must comply with this standard. The standard also addresses certain circumstances where an auditor may be faced with an issue that challenges their ability to act independently. Where possible, the standard seeks to advise audit firms on circumstances that are prohibited and also circumstances that are only allowed after adequate safeguards have been put in place.

Non-Audit Services

Regularly firms will provide additional services to an audit client (referred to as non-audit services). This can create a number of threats to an auditors independence (self-review, self interest, management, advocacy, familiarity and intimidation threats)

Before the firm accepts to provide a non-audit service to the client, the engagement partner should:

  • identify and assess the significance of any related threats to the integrity or objectivity of the firm and covered persons, including whether independence would be compromised
  • identify and assess the effectiveness of the available safeguards to eliminate the threats or reduce them to a level where independence would not be compromised
  • consider whether it is probable that an objective, reasonable and informed third party, having regard to the threats and safeguards, would conclude that that the proposed non-audit / additional service would not impair integrity or objectivity and compromise the independence of the firm or covered persons.

If the auditor determines that Read more

Posted on November 7, 2017 by Michael O'Halloran

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