Pensions: new tests for the auditor
Article Abstract:
New pension auditing guidelines were issued in the UK in November, 1988, which establish that the three fundamental standards of auditing apply to pension schemes as much as other organizations. The legal requirements for pension accounts include a year-end statement of assets and liabilities at market value and a statement of compliance with Statement of Recommended Practice One. The guidelines delineate how auditors should gather information and discharge their reporting obligations. Disclosure regulations call for a separate opinion on contributions to pension schemes. The guidelines make it apparent that, due to the fact that the exclusion of pension liabilities from balance sheets renders the concept of net asset value meaningless, auditors should demand a higher level of precision from a pension fund than from a company with comparable assets. Pension scheme auditors will have to assume the role management quality control advisor.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1989
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The rise of the environmental audit
Article Abstract:
An environmental audit can be used by companies to show compliance with standards and to create a strategic plan to gain competitive advantage. To implement a successful environmental audit, corporations must build an audit team. It is essential that the team secure the confidence of employees to be affected by the audit, and gain management cooperation for any improvements to be made. The environmental audit can be broken down into three phases: suppliers, processes, and products. Companies must ensure that their suppliers are also environmentally friendly. The team must evaluate the weaknesses and strengths of current practices and the efficiency of management systems and technical processes, audit products and by-products created by the operations process to see what can be improved, and examine investment decisions according to environmental criteria and assess the liabilities of not doing so.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1990
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New wine in old bottles
Article Abstract:
The audit risk model, though perceived as a radical new auditing technique, is actually a new formulation for communicating the same information conveyed by traditional audit techniques. Like statistical sampling, the audit risk model can be of limited usefulness due to its rigidity. The audit risk model formula is Audit Risk equals Inherent Risk times Control Risk times Detection Risk: in other words, audit risk is the remnant of inherent risk after allowing for the auditor's and client's chances of detecting errors. The audit risk model is simply a guide to using statistical sampling in substantive tests on balances. Confidence levels are reduced where appropriate in relation to the amount of assurance that is believed to have been obtained from considering inherent and internal control factors that are relevant to that segment being auditing.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1990
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