March 20, 2022

Section 162(1) of the Companies Act stipulates the statements that should be expressly stated in the auditor‘s report. These are; Whether the auditor has obtained all the information and explanation which to the best of his knowledge and belief were necessary for audit proposes. Whether in his opinion, proper books of accounts have been kept by the company, so far as it appears from the examination of those books and proper returns adequate for the purposes of the audit from branches not visited by him. Whether the company‘s balance sheet and profit and loss accounts dealt by the report are in agreement with the books of the accounts and returns. Whether in his opinion and to the best of his information and according to the explanations given to him, the financial statements give the information required by the Companies Act in the manner so required and give at rue and fair view. In the case of the balance sheet, of the state of affairs of the company as at the end of the accounting period. In the case of the profit and loss account, of the state of profit or loss of the company in the financial year. In the case of a holding company submitting group financial statements whether in his opinion, the group financial statements have been prepared in accordance with the provisions of the Companies Act so as to give a true and fair view of the state of affairs and profit or loss of the company.

An appropriate declaration that the expert understands his duty to the court and has complied with that duty. A statement of truth relevant curriculum vitae detailing qualifications and experience appropriate to the opinion expressed The substance of all material instructions summarising the facts and instructions which are material to the opinions Where there is a range of opinion on a matter a summary of the range and reasons for the expert‘s own opinion The report should be; Clear and easy to read Have minimal errors Show that the forensic accountant is protecting independence of the investigation Should show the competence of the forensic accountant

This is the process of gathering , analysing and reporting on data, in a pre-defined context for the purpose of finding facts and/or evidence in the context of financial /legal disputes /or irregularities and giving preventive advice in this area. There are two main aspects of forensic investigations:  Determining the loss Reporting the findings Applications of forensic audits Fraud investigation-where evidence of fraud is gathered it could be presented in court of law so as to; 1. To prove or disapprove the suspicious 2. To identify persons involved 3. To provide evidence for appropriate action possibly criminal proceedings Negligence-this covers personal injuries, fatal accidents, medical negligence, professional negligence, fires and other forms of damage caused by negligence. The measure of damage is to put the injured person back in the financial position they would have been but for the negligence Insurance claims-these are claims for such things as business interruption under insurance policies .The loss will be quantified in accordance with the terms of the policy Others include contract disputes ,copyright and royalty audits, matrimonial and asset tracing Expert witness-these are generally forensic accountants. The require a recognised accountancy qualification .The work of a forensic accountant is subject to scrutiny by both sides and ,if it is wrong ,the court can make cost orders against him.

The objective of compilations is to collect, summarize and classify financial information i.e. using accounting rather than auditing expertise into understandable form e.g. financial statements. In a compilation engagement, the accountant is engaged to use accounting expertise as opposed to auditing expertise to collect, classify and summarize financial information. This ordinarily entails reducing detailed data to a manageable and understandable form without a requirement to test the assertions underlying that information. The procedures employed are not designed and do not enable the accountant to express any assurance on the financial information. However, users of the compiled financial information derive some benefit as a result of the accountant‘s involvement because the service has been performed with due professional skill and care.

We have established that the directors and auditors of a limited company have very precise legal duties, we are also aware that modern accountancy firms thrive on their ability to provide a wide range of professional services in addition to audit. It is the purpose of an engagement letter to define clearly the extent of the auditor‘s responsibilities and so minimise the possibility of any misunderstanding between the client and the auditor. Further, the engagement letter provides written confirmation of the auditor‘s acceptance of the appointment, the scope of the audit, the form of his report and scope of any non-audit services. If an engagement letter is not sent to clients – both new and existing – there is scope for argument about the precise extent of the respective obligations of the client and its directors and the auditor. The contents of an engagement letter should be discussed and agreed with management before it is sent and preferably prior to the audit appointment). The engagement letter is a well established audit technique and ISA 210 Terms of Audit Engagements provides guidance in this area. The use of engagement letters There is a contractual relationship between an auditor and his client. The auditor should therefore ensure that at the time he agreed to perform certain work for the client, the scope of his responsibilities is made clear preferably in writing, in that the terms of his contract with his client are properly defined. Where possible a letter of engagement should be prepared setting out in detail the actual services to be performed, and the terms of engagement should be accepted by the client so as to minimise the risk of disputes regarding the duties assumed

A procurement audit is the independent examination of, and expression of opinion on, the procurement records of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligation: If we take the example of a limited company audit, then we can immediately appreciate that (before a new audit client is accepted, the auditor concerned must ensure that there are no independence or other ethical problems likely to cause conflict with the ethical code. Furthermore, it is important for the new auditor to ensure that he has been appointed in a proper and legal manner – it will be appreciated that one auditor‘s appointment is normally another auditor‘s removal or resignation). Essentially, the initial procedures to be observed can be considered in 2 stages: Procedures before accepting nomination; and Procedures after accepting nomination. Procedure before accepting nomination The nominee auditor must take the following steps: Ensure that he is professionally qualified to act i.e. is not disqualified on any legal or ethical grounds. Ensure that the firm‘s existing resources are adequate to service the needs of the new client. This will raise questions of staff and time availability and the firm‘s technical expertise. Seek references in respect of the new client company, it may be, as is often the case, that the directors of the company are already personally known to the firm, if not, independent enquiries should be made concerning the status of the company and its directors. Communicate with the retiring auditor: Procedures after accepting nomination Ensure that the outgoing auditor‘s removal or resignation has been properly conducted in accordance with the Companies Act 1962. The new auditor should see a valid notice of the outgoing auditor‘s resignation, or confirm that the outgoing auditor was properly removed at a general meeting of the company. Ensure that the new auditor‘s appointment is valid. The new auditor should obtain a copy of the resolution passed at the general meeting appointing him as the company‘s auditor. Set up and submit a letter of engagement to the directors of the company.

The objective of a review of procurement records is to enable an auditor to state whether, on the basis of procedures which do not provide all the evidence that would be required in an audit, anything has come to the auditor‘s attention that causes the auditor to believe that the financial statements and procurement records are not prepared, in all material respects, in accordance with an identified audit reporting framework. A similar objective applies to the review of financial or other information prepared in accordance with appropriate criteria. A review comprises inquiry and analytical procedures, which are designed to review the reliability of an assertion that is the responsibility of one party for use by another party. While a review involves the application of audit skills and techniques and the gathering of evidence, it does not ordinarily involve an assessment of procurement and internal control systems, tests of records and of responses to inquiries by obtaining collaborating evidence through inspection, observation, confirmation and computation, which are procedures ordinarily performed during an audit. Although the auditor attempts to become aware of all significant matters, the procedures of a review make the achievement of this objective less likely than in an audit engagement, thus the level of assurance provided in a review report is correspondingly less than that given in an audit report