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The standard requirement of auditing requires auditors to conduct audits of the companies independently and without any interference from the concerned company. According to few surveys the auditors are usually hassled by the companies' top management while the auditors are conducting the audit report of the concerned companies, the surveys have also reported that the auditors usually comprises their independence by providing clients with the consulting services like non-audit services, consultation on auditing reports and also on matters not associated with auditing. However this paper is basically about the problems faced by auditors while doing the audit of any company. The paper involves that how any management of the company places obstacles and hurdles for the auditors while doing auditing and also how and why the company management doesn't support the audit program which makes the audit for the auditors pretty difficult to perform. (Spanneut, 2012)
There are various problems that are faced by the auditing companies while doing audits. The paper involves the problems faced by the famous auditing company KPMG while conducting
Problems Faced by Auditors
There are various problems that are faced by the auditing companies while doing audits. However, few of the basic problems that are faced by auditing companies are pointed out by famous auditing company KPMG. Some of those problems are discussed below: (heena Carmichael)
No Management Support
First and the foremost problem faced by any auditing companies these days is insubordination between auditors and the management of the company for which the auditing needs to be done. According to many reports the company managers do not have the understanding of the importance of the company audit report. Hence, they do not cooperate much with the audit officers in order to provide them with complete information. According to ISO 19011 every executive team of a company needs to set an audit criteria but in most of the cases many executive teams of multinational companies fails to understand or read this important term as set by ISO 19011. Therefore, according to KPMG one of the basic step t overcome the problems created by the executive team of the company is to tell them the importance of the auditing through professionals. Furthermore it has now become the job of auditors to make the companies executive team understand the reasons for performing internal audits including all other types of audits. (Kieso, (2012).)
Auditing these days has become necessity of all the multinational companies but still many companies do not understand the importance of it being done through professionals. Many companies in order to save the company get the company's auditing done through unprofessional that afterwards cost them a lot in means of money and loss. As per KPMG in order to improve the performance of auditing which usually gets affected by the insubordination of the executives of the company, the auditors' needs to communicate with the executives as the communication the key to resolve many disputes. The communication can be in form of audit reports between both the units i.e. the auditors and the executives of the companies. Also auditors should try to encourage the working of the executives by re-emphasizing management's role in the audit process.
Dealing with difficult audit
KPMG being one of the best auditing firms encourages auditors to interact with the owner's or executives of the company while reviewing his or her processes, procedures, and records. So that the auditor will get better idea of auditing and will able to deal with difficult auditing easily.
No Audit Preparation
Another problem that is faced by auditors is audit preparation. Every year auditors promised themselves that this year their audit reports will be better than the previous year but still the results remains the same. This problem occurs because of the audit is done at the last moments which causes lots of cause and the work is done under stress and deadlines. (Bragg, Bragg, S. M. (2011))
As we all know that the audit preparation is the most vital part of an audit program. So in order to address this issue an auditor must always keep tabs on time as the time has always been the key to success especially when it comes to auditing. One must schedule his time at least two weeks before the audit is to be done. Audits that are under stress and deadlines are often hazardous.
It is another factor which has pointed out by famous auditing firms. According to these firms if auditors do not have an internal control then they will not be able to perform auditing of the company properly. It is the job of auditors to have an understanding of internal control as it is very important for the auditor and lies within the framework of the audit rules and regulations. It is further enunciated in the framework of audit rules and regulations that the auditor must see that internal control of has been properly designed and implemented. It all depends on auditors if they want to they can change modify or alternate the even the timings including the procedure of audit. However such changing's shall be entirely based on the assessment of the internal control of auditor including the results that will come out from the internal court. For instance programs that are poorly and badly controlled have more chances failing and crippling, so auditors will need to focus their skill on such programs.
In addition to this auditors may get complete knowledge of internal control through different forms like inquiries, inspection, evaluations, monitoring by going through different document and records and by reviewing previous auditing records and reports. According to the report by KPMG different auditors or different audit firms use different types of methods depending upon the audit objectives and risk involved also the knowledge auditors have regarding the internal control gain.