Audit and accountancy pitfalls : a casebook for practising accountants, lawyers and insurers

Author

• Woolf, Emily

Additional Author(s)

• Hindson, Moira

Publisher

Hoboken, New Jersey: John Wiley & Sons Ltd, 2015

Language

English

ISBN

9781119209287

Series

Subject(s)

• ACCOUNTING FRAUD
• FORENSIC ACCOUNTING

Notes

. .

Abstract

Avoiding Audit Pitfalls offers real case studies covering a comprehensive range of challenges and mistakes that any accountant can make during the course of their career. Focusing on everyday mistakes and failures common to auditors in all territories worldwide, the book will cover audit failures that have led to fraud going undetected as well as failure to accurately assess a firm's ability to continue. This book will appeal not only to general accountants and auditors but also to forensic accountant, and students in the field

Physical Dimension

Number of Page(s)

1 online resource (vii, 327 p.)

Dimension

-

Other Desc.

-

Summary / Review / Table of Content

Preface vii
1 Introduction 1
1.1 Staying out of trouble 1
1.2 The forensic accountant’s role 2
1.3 Maintaining impartiality 3
1.4 The disciplines of expert witness work 3
1.5 Conduct that is ‘reasonably competent’ 4
1.6 The disciplinary arena 4
1.7 Litigation in the current climate 6
2 Auditors’ Failure to Detect Theft, Embezzlement and
Financial Crime 9
2.1 Summary of types of fraud 9
2.2 Introduction 10
2.3 Auditors’ responsibility for fraud detection 11
2.4 Limiting liability 12
2.5 Perspectives on fraud – respective responsibilities of
management and auditors 12
2.6 Disclosure of management fraud 14
2.7 Monitoring the client’s regulatory conduct 16
2.8 Fraud by employees 17
A. Failure to carry out basic procedures 18
B. Failure to recognise a client’s excessive reliance
on a trusted employee 28
C. General failure to recognise internal control
weaknesses 42
D. Inappropriate delegation of key audit tests 50
E. Failure to follow up suspicious circumstances 53
2.9 Using the company as an instrument of fraud by
senior management 59
F. Lack of independence 60
G. Lack of resources 64
H. Failure to obtain third party verification 67
I. Improper reliance on management representations 70
J. Risks of international affiliations and
inappropriate reliance on the work of others 76
K. Failure of analytical review 81
L. Lack of awareness of risk 84
M. The practice ethical problem 86
N. Would any audit have picked this up? 88
2.10 Summary of key lessons 90
3 Negligent Audit Work Not Involving Theft of
Company Assets 93
3.1 Introduction 93
3.2 Fundamental auditing pitfalls 94
A. Failure to carry out basic procedures 94
B. Risks of undertaking work outside the scope of
the auditor’s expertise 98
C. Improper reliance on management representations 105
D. Failure of analytical review 108
E. Inadequate assessment of going concern 111
F. Succumbing to client pressure 117
G. Risks associated with group structures and
entities under common control 125
H. Risks inherent in subcontracting arrangements
and joint audits 129
I. Risks associated with disappointing acquisitions 134
3.3 Summary of key lessons 145
4 Professional Pitfalls for Accountants 147
4.1 Importance of engagement letters 147
4.2 Comparison with the USA 147
4.3 Liability exposure to third parties 149
A. Preparation of unaudited accounts 150
B. Preparation of independent reports 155
C. Counterclaims following pursuit of outstanding
fees 158
D. Dangers of administrative foul-ups 161
E. Coping with clients whose record-keeping is
chaotic 166
F. Conflicts of interest 169
G. Unwittingly becoming a shadow director 174
H. Negligent certification of creditworthiness 177
I. Vicarious liability following actions of
consultants and staff 179
J. Provision of advice outside the scope of an
accountant’s expertise 195
K. Accountants acting as trustees 198
L. Allegations of negligent valuation 201
M. The aftermath of disappointing acquisitions 204
4.4 Summary of key lessons 219
5 Tax Related Claims 221
5.1 Introduction 221
5.2 Provision of incorrect or inadequate advice 223
A. Failure properly to investigate a client’s
circumstances 223
B. Danger of not keeping abreast of changing
circumstances 224
C. Failure to define responsibility following
an engagement 226
D. Consequences of giving casual advice that
proves to be inappropriate 230
E. Absence of advice may be negligent 237
F. Danger of giving advice that falls outside one’s
expertise 239
5.3 Failed practice administration 242
G. Failure of accountant to keep records of client
contact 242
H. Failure of internal systems within practice
administration 245
I. Know your partners. . . 251
J. and your employees! 255
5.4 Summary of key lessons 258
6 The Disciplinary Framework 261
6.1 Introduction 261
6.2 Structure and procedures 261
6.3 Costs 263
A. Conflicts of interest 263
B. Dangers of introducing clients to third party
advisers 265
C. Dangers of not keeping up to date 267
D. Non-executive directorships 269
E. Complaints from official sources 272
F. How to respond to a formal complaint – the
dangers 274
6.4 Summary of key lessons 277
Appendix: From the archives 279
The astonishing story of the ‘salad oil swindle’ 281
The Equity Funding story 294
Glossary 309
Index 315

Exemplar(s)

#	Accession No.	Call Number	Location	Status
1.	00371/19	657.45 Woo A	Online !	Available