Page 53 - DCOM204_AUDITING_THEORY

Unit 3: Roles and Independence of Auditor

Self Assessment Notes

Fill in the blanks:
4. The appearance of independence can be evaluated at .......................... and ............................
5. Duties and powers of the comptroller and Auditor-General of India can be divided into
...................... and ........................
6. CAG also submits separate audit reports on all ..................... and.............., for which he is the
sole auditor.

3.5 Summary

In almost every sophisticated industry there are auditors and inspectors function point
analysis should not be any different.

There is no need to fear audits or auditors. If they are done appropriately they should
provide valuable feedback on the function point counting process.
Auditing is the process by which a competent, independent person accumulates and
evaluates evidence about quantifiable information related to a specific entity for the
purpose of determining and reporting on the degree of correspondence between the
quantifiable information and established criteria.
Evidence can take many different forms, the function point count, system documentation,
conversations with developers and users, and interviews with individuals that conducted
the original count.
Additionally, the evidence must be pertain or be relevant to the audit. The auditor must be
skilled at finding areas to test or review further.

All evidence should be evaluated based upon valuation, completeness, classification, rating,
mechanical accuracy, and analytical analysis.
The auditor must be a qualified to understand the criteria used and competent to know the
types and amount of evidence to accumulate to reach the proper conclusion after the
evidence has been examined.

Auditors shall conduct the audit of the financial statements of an entity with integrity,
objectivity and independence.
The official definition of audit independence equates the term with an attitude and approach
of objectivity (being unbiased, fair, and impartial) and integrity (being intellectually
honest).
Independence is an essential auditing standard because the opinion of the independent
accountant is furnished for the purpose of adding justified credibility to financial statements,
which are primarily the representations of management.

The audit report may allow you to correct any incorrect function point counts, and re-
evaluate the decisions you have made to date.

3.6 Keywords

Audit plays a pivotal role in keeping proper legal check on those who carry on the business in
a fiduciary capacity. Shareholders not being legal experts.
Auditor Independence can be defined as a reference to the independence of internal or external
auditors from parties that might have a financial interest in the business being audited.

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