Group Judgment and Decision Making †Free Samples to Students

Question: Discuss about the Group Judgment and Decision Making. Answer: Introduction: Audit and assurance service can be defined as the services that auditors provide to their client, by verifying their books of accounts and state true and fair view of the financial position. This report is based on critical thinking of auditor and their staff regarding their audit procedure. This report addresses the responsibility of auditor and application of professional scepticism in audit work. In the provided case study Carrie is the audit partner in the audit firm and is facing some issues while auditing. Carrie has the professional responsibility to conduct an audit in the correct manner and if she faces any issue shall be reported or mitigated. In the provided case study, there are some expenses in the financial statement of the client which does not seem to be correct, according to Carrie. On the other hand, the client has not provided appropriate justification on the same. In the light of the above scenario, the following answers: It is the professional responsibility of the auditor and audit team to investigate into books of accounts and other matters of the client. At every point of time, auditor or audit team shall apply professional judgment in order to successfully implement audit procedure. The responsibility of auditor in every audit engagement is to conduct an audit in an effective manner. In this case, Carrie is the auditor that identifies an issue related to expenses of the client. But she does not get appropriate justification for the same. Therefore she should consult with the client and should ask for sufficient justification for the same. If the client refuses to justify or does not provide appropriate justification then in this case Carries should conduct a detailed audit. The objective of detailed auditing shall be to obtain sufficient and appropriate audit evidence (Anca Andra, 2014). Sufficient and appropriate should be collected that should overcome every doubt of Carrie in the audit proces s. Carrie shall implement substantive procedure and compliance procedure. On the other hand, she can implement an analytical procedure to check whether expense or mater is occurring each year or is of new nature. Conclusion: In this case, Carrie shall implement or undertake a detailed analysis of accounts and should implement professional judgment regarding the issue. Related party transactions are those transactions in which transaction or dealing is done with the related party by the business entity. In related party transaction, possibility or probability of indulging into fraud or overstatement expenses or undergarment of income can take place. The auditor is considered as a watchdog in terms of keeping in eyes on each and every aspect of the business transaction and other matters. Related party transactions are the area where auditor shall apply professional scepticism into his / her audit work (Anca Manoiu, 2015). In the given case, if the transaction or issue that Carrie is worried about is related party transaction then she should examine facts and figures of an issue in detail. Related party transactions are more vulnerable to fraud and other financial issues or misrepresentation of facts. In this case, there is a possibility that there is systematic fraud, by undergoing in related party transaction, i.e. the issue Carrie is worried about. The client has not provided a sufficient or appropriate explanation to Carrie and even after detailed verification by Carrie or audit team, then she should consult with the management of the client. If the client is not able to provide sufficient and appropriate audit evidence regarding the same (Bortoli, et, al, 2017). Even if Carrie is not satisfied with the response then she should obtain management representation regarding the same issue. Management representation is the letter in writing provided by the management of the company, in case auditor is n ot able to obtain sufficient and appropriate audit evidence (Trotman, et. al, 2015). References Anca Oana Chi?, Andra Maria Achim. (2014). Professional judgment. The key to a successful audit. SEA: Practical Application of Science, (3), 217-222. Anca Oana Chis, Manoiu Sorana. (2015). Professional Judgement: A Must in the Audit of Financial Statements. Annals of the University of Oradea: Economic Science, 25(1), 993-996. De Bortoli, L., Ogloff, J., Coles, J., Dolan, M. (2017). Towards best practice: Combining evidence-based research, structured assessment, and professional judgment. Child Family Social Work, 22(2), 660-669. Trotman, K., Bauer, T., Humphreys, K. (2015). Group judgment and decision making in auditing: Past and future research. Accounting, Organizations and Society, 47, 56.