External Auditors and Fraud Examiners Essay Example | Topics and Well Written Essays - 3500 words

External Auditors and postiche Examiners - Essay ExampleThis paper illustrates that an external attender is so called as to distinguish him from an internal hearer who is an in-house professional. While the internal listener is a paid employee of the entity, the external auditor is an independent professional engage by the entity for a fee and as required by Companies Act. To be more specific, an external auditor gives his opinion as to whether financial statements are materially correct. He is deemed independent as he has no special relationship and pecuniary interest in the customer that might possibly encourage him to terminate adverse facts and evidence of the client the auditor evaluates. Thus, to be independent, the auditor cannot both work under the client as well as act as the clients external auditor. The external auditor also carries out compliance, operational and rhetorical audits. Forensic auditing is a special purpose audit to dig financial frauds and other cri mes. Forensic as its meaning (i.e. of the law) suggests, forensic auditors, detect information for being apply as litigation support. If the forensic auditor is a CA or CPA, his evidence at running play would lend more credibility although it is not mandatory for a forensic auditor to have a CPA license in the U.S. The external auditor in the process of his auditing activity concludes whether the assertions made in the financial statements are true and fair. The assertions are in the nature of how the business is conducted that is how its business generates income and spends it, how it manages its inventory, how it records information some its property, plant, equipment, its long-term liabilities, equity, cash, and investments. Although forensic auditing and fraud examining are interchangeably used, both are different disciplines. While forensic accounting involves the application of professional accounting skills in a civil or criminal litigation. Thus, close of the fraud exami nations are part of forensic accounting, but every forensic accosting is a fraud examination. For example, an apt may be said to be engaged in forensic accounting while the furnishing measure out of a property to the court which need not involve any fraud unlike in the case of fraud examination.