An audit is defined as a methodical procedure obtaining a company or an organisation ‘s fiscal records, which is subsequently on examined by a competent and indifferent individual, such as the hearer and presented to the interested parties. It is an rating to happen out whether the point observed is carried out and prepared as expected to cognize the cogency of the information obtained. The hearers must cognize what and how much grounds to be collected because it will find the hearer ‘s determination. The hearers collect utile information and procedure this information following the established processs provided by the auditing criterions boards. This basic regulation, and stairss include the Generally Accepted Accounting Principles ( GAAP ) and all that involved in fixing the fiscal statement, including the hearer must stay to the demands established by the Generally Accepted Accounting Principles. Audit is a really of import procedure that provides the confidence to the users of the audited information. Audited information will clear up if the audited information is utile and dependable to the company or otherwise and to happen out whether the established processs are followed. There are three types of hearers but in this paper, the external hearer will be the chief focal point. Furthermore, there will be treatments about the current issues and aims of the International Auditing and Assurance Standards Boards and The Audit and Assurance Standards Board in Malaysia.


There are three different types of hearers, company hearers, authorities hearers and internal hearers. Company hearers are normally the spouses of an accounting house who audit the fiscal statements of the company. Government hearers audit the authorities sections and statutory organic structures such as the populace institutes and the metropolis halls. The types of hearers mentioned above are from outside of the organisation this is why they are independent of the company involved. However, internal hearers are associated with operational and conformity audit and they are chiefly the employees of the company, which makes them non really independent. There is one relationship affecting the internal audit with an external audit. An internal audit merely reports straight to the Board of Directors or the Audit Committee, while an external audit studies to the Audit Committee through the Chief of Executive Officers on the fiscal statements. An external audit is non a portion of the accounting house, organisation or an internal control system. It is an external employee engages to the specific undertaking to carry on an audit and give sentiment whether or non the fiscal statements of external stakeholders histories following the just and true construct. Intentionally, an external hearer must cognize if the efficiency of the organisation ‘s internal control system is dependable or no and to make so, the external hearer will analyze the internal control system to the extent on the system ‘s dependability.

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As an independent hearer, such as the external hearer gathers, programs, behaviors and studies the consequences based on the Generally Accepted Auditing Standards. In order to carry on a just audit, an external hearer must follow the processs and criterions given. The Audit Committee is mostly involved in choosing the proper and most suited external hearer and they besides play a really of import function in measuring the hearer overall public presentation. Harmonizing to the Generally Accepted Auditing Standards, an external hearer must hold the suited proficient preparation and expertness to execute an audit every bit good as keeping an independency rational attitude a really of import character in an hearer. By and large Accepted Auditing Standards requires the external hearer to do certain that the Audit Committee is informed on all affairs that has come to the attending, including legal and illegal company ‘s Acts of the Apostless which could consequence the company ‘s one-year fiscal study. The hearer must to the full understand the entity before obtaining the grounds needed to avoid any error in the statements due to mistakes and to plan the suited nature and degree of audit processs.

The hearer must besides follow the processs by the Generally Accepted Accounting Principles and place the state of affairs of the rules that may non be observed in the current period, in order to continue to the following period. The independency mental character of an external hearer besides plays a really of import portion in carry oning a study. It is of import because any concerned parties should non act upon anything the hearer discloses into the study or else the consequence may non be true. The hearer will province either to show or non to show the sentiment and the ground sing the fiscal statements in the hearer study. For illustration, if at any times, the hearer discovers that the house is non independent, it is necessary for the hearer to halt auditing. The hearer has to publish a short study saying that the house is non being independent therefore the hearer can non give any sort of sentiment sing to the fiscal statement. Finally, the hearer has to clear up in the concluding study, whether the information is equal or otherwise.

External hearers follow the standard scenes set by the national and international criterion scenes organisations, which are International Auditing and Assurance Standards Boards and the Audit and Assurance Standards Board as the national board. These boards introduced and develop criterions to put onto the extent of an economic act. The International Auditing and Assurance Standards Boards ( IAASB ) is an independent standard-setting board of the International Federation of Accountants ( IFAC ) , which is based in New York. It was originally named the International Auditing Practices Committee ( IAPC ) in 1978 and has been recognized worldwide for the quality and credibleness of the standard scene procedure. IAASB has launched 32 International Standards on Auditing ( ISA ) and 20 International Auditing Statements ( IAP ) . Through out the old ages, IAASB has declared subjects sing the economic system such as quality control.

The IAASB primary intent is to put out independently a high criterion to pursuit the public involvement. Its standard scenes are chiefly covering with reviewing, other confidence quality control, and high recognizable quality of scrutinizing criterions every bit good as other related services run intoing the national and international criterions. This is to heighten the value and consistence of accounting pattern around the universe to increase the public confidence in fiscal coverage. Approximately 100 states are following or in usage of International Standards on Auditing ( ISA ) issued by IAASB into as a footing of their national auditing criterions. As a consequence, IAASB has been developing ISA over the old ages to do certain that the hearers have the right demand to cover with any public or market concern issues. IAASB outlined a procedure to run into the exact criterions. The procedure conceive of research and audience, crystalline argument, public remark exposure, remark consideration and the concluding affirmative blessing made by at least two-thirds ballot of the IAASB members.

One of IAASB current issue is the Fair Value Auditing Guidance. The intent of this meeting is to happen a proper attack to present just value construct in an audit.

Equally good as international, the national auditing criterions board besides requires the external hearer to follow its criterions. In Malaysia, the Auditing Practices Board supports the auditing criterions. Malayan Institute of Accountants ( MIA ) established this group of Auditing Practices Board. Since 41 old ages ago, MIA has been active in assisting the Malayan environment and has put a batch of part in the well being of constructing the states economic system. Other than publishing the auditing criterions, Auditing Practices Board besides announce other guidelines to be use by the hearers. This guideline includes the Recommended Practices Guide ( RPG ) and proficient bulletins. MIA involves in detecting international and local accounting development and has a frequent treatment with the regulative organic structures often so that the criterions will ever be improved to fit the national criterion scene.

The chief intents of MIA is to back up and continuously develop scrutinizing and confidence services every bit good as to function the public involvement and increase the accounting as a profession in Malaysia. As a member of the International Federation of Accountants ( IFAC ) , Malaysia has to stay to all the standard scenes in all of the scrutinizing public presentation. MIA besides expects to revise and see of following latest standard scenes and other declarations issued by the International Auditing and Assurance Standards Boards ( IAASB ) . MIA adapts the ISA before they could be use by hearers of the company ‘s in Malaysia. Each criterion has an designation numeral rubric, for illustration there is ISA 200, ISA 220 and others. Other than the criterions set by the International Standards of Auditing, MIA besides introduce its ain criterions, in which the criterion is merely related to the local issues. MIA is responsibly cognizant of the annual programs, undertakings and knowing way, to be cognizant of the capacity of homo and fiscal resources in Malaysia.

True and just value means that the statements should be presented moderately and true. Auditor carries out an audit of a certain fiscal statements and the hearer ‘s sentiment will province if the fiscal statement as arranged by the direction has meet the demand of Companies Act 1965. This includes following with General Auditing and Assurance Principles and accounting criterions which has been issued by the Malayan Accounting Standards Boards ( MASB ) under Section 166A of the Act. When fixing for a fiscal statement, all legal proviso and other Torahs, which are relevant to the history, has to be followed. The lone manner the statements can run into up with the demands if Companies Act 1965 is when fiscal statements show a true and just position of the company, in another words everything that has undergone in the company is written in the statement.

The true and just position is non defined in the Companies Act 1965. However, this true and just position must be shown on the statement so that the fiscal statements does non incorporate any misstatements and will non misdirect the company in farther determination devising. Another ordinance to a true and just position construct is when a fiscal statement has recorded all the concern minutess accurately based on the accounting accepted rules and following the accounting criterions. All concern minutess should be written in the history clearly and right without go forthing any little affairs because this will consequence the audited information. An external hearer is non expected to do certain that the fiscal statement is free of mistakes and fraud. Although, an external hearer will hold to analyze the organisation ‘s fiscal statements to verify if it has shown the true and just value. All fiscal statements have to follow the correct and indifferent accounting standards that have been established in order to get a true and just value. Many have assumed when following with the established standards will most likely lead to a true and just value fiscal statement.


As a decision, there are three different types of hearer but the most of import hearer in fixing the concluding fiscal statement is an external hearer. The external hearer is needed to verify a fiscal statement, because external hearer is trained to keep an independent and indifferent profile so that the hearer can analyze the history truthfully. During the procedure of an audit, the hearer must stay the Generally Auditing and Assurance Standards set by the International national auditing criterions boards. Nevertheless, an external hearer must formalize if the book of history shows the true and just value construct. A true and just position is a construct to find whether or non all the information in the statement is stated clearly and truthfully. Even though an external hearer ‘s chief occupation is non to observe mistakes or fraud, the hearer must clear up if the audited information that has been prepared shows this value. This is really of import so that the company or the organisation can see clearly their usage of the company ‘s support and their chief purposes for the company ‘s future intent. The independent hearer will besides observe misstatement to avoid deceptive information that is besides of import in the company ‘s future determination devising. The concluding sentiment is given by the external hearer and must non be influenced by outside factors of any parties with involvements of the history.


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