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All through past century, the standard audit report has slowly and cautiously evolved. Most recently, in 2011, the AICPA's Auditing Standards Board (ASB) released Statement on Auditing Standards (SAS) 122, Statements on Auditing Standards: Clarification and Recodification, commonly referred to as its clarity standards.  This revision to the standard audit report's format included captioned sections and new language that was meant to make it clearer what the role of the auditor is and differentiate it from that of management. Previous to that, the last significant revisions to the standard audit report (SAS 58, Reports on Audited Financial Accounts) were made in 1988 as part of a set of standards known as the "expectations gap" standards. An early effort to explain the duties of auditors to users was SAS 58. The form and content of the "standard" audit report will significantly change with the expected adoption of a number of new audit reporting standards tha...

Many managers have been forced to contemplate making some budget cuts as a result of the outbreak of the Coronavirus. In fact, as they struggled to make ends meet, many firms were compelled to postpone capital expenditures, lower inventory levels, furlough and fire employees, and carry out other cost-cutting measures. In how businesses implement such procedures, internal audit has a role to play. For instance, a number of my most recent internal audit tasks dealt with the efficient administration of operating expenses. Managers and audit committees have been requesting assurance on their cost control procedures over the past few months. The subject has a broad range of work that includes benchmarking cost structures across entities, examining the existence of adequate policies and dashboards, identifying quick wins for cost reduction, reviewing bidding and supplier selection procedures, and—on a more tactical level—the analysis and recovery of past-due payments. Most cost control strat...

This article provides an introduction to deep learning technology, a new type of artificial intelligence that can be taught to see patterns in enormous amounts of data that are incomprehensible to humans. This technology, which is still under development, offers a means of using big data to produce supplemental audit evidence that enhances the effectiveness and efficiency of audit automation and decision-making. The authors also cover how these methods might be used in auditing processes. The creation of data-intensive technologies (such as ERP systems, sensors, cloud storage, and remote communication tools) in the current corporate environment makes it easier to produce and maintain vast amounts of data, which calls for a new data environment and drives the need for audit automation. The most advanced application of artificial intelligence, deep learning, has been used by top accounting companies to carry out audit tasks. For instance, KPMG uses the deep learning-powered systems of IB...

 Despite popular belief, standard audits of financial accounts do involve some responsibility for detecting fraud. The author discusses the distinctions between the fraud audit and the standard audit while dispelling some popular misconceptions and highlighting some commonalities. He believes that all auditors have a responsibility to watch out for fraud. The defence line is frequently "an audit of financial statements is not a fraud audit" when an auditor has missed a significant financial statement fraud misstatement. According to the author, this comparison incorrectly implies that an auditor of financial statements has no obligation to uncover fraud, which undermines the public's faith in the calibre and value of independent audits. It can also misrepresent the facts that are analysing the conduct of the auditor after a significant fraud that went undetected, including boards of directors and audit committees who are considering reappointment, judges and juries who ar...

Machine learning has the ability to significantly enhance audit speed and quality, but it also has some hazards. The authors discuss present and potential applications of machine learning in the audit profession while also giving a comprehensive overview of the field and defining certain key terms. Also, they look at the difficulties that machine learning technology poses as well as potential effects on CPA firms and their personnel. It is a crucial component of artificial intelligence (AI), which was founded on the hypothesis that machines might be trained to learn in ways akin to those used by humans. While the concept of machine learning has been known for decades, humans are just now starting to understand its dynamic capabilities. Machine learning has become an important part of contemporary life as a result of the abundance of data, which is mostly attributable to the development of the Internet as well as improvements in computer processing power and data storage.  Machine l...

Auditors have several obligations to their customers, but they also have a responsibility to maintain the public's confidence. Auditors' reputations can occasionally be harmed by the unfavourable consequences of their clients' behaviour. This can be avoided by thoroughly screening clients and their actions at every level of an engagement. The authors offer tips from a range of experts on how to handle client acceptance, retention, and when necessary disengagement. No auditor wants to find that a client has been accused of fraud after issuing a clear audit opinion. Yet if a CPA company does not adhere to industry-recommended client acceptance and continuance policies, that risk is present, in addition to many others. In one recent instance, defence lawyer Thomas R. Manisero of Wilson Elser represented an accounting firm that, following its merger with another firm, conducted an audit for an investment fund. Although the service area was particularly high risk and outside the...