Review on the Impact of Management Integrity on Audit...

Review on the Impact of Management Integrity on Audit Planning and Evidence Objective This research is done to assess the correlation between management integrity and RMM, audit planning and misstatement detection, which leads to analysis of the impact of management integrity information on audit conduct. Motivation Some cases of failures such as Enron and Sarbanes-Oxley have led public in general requiring auditors to be more careful in conducting their audit tasks, especially in terms of audited companies’ internal controls. The basic of these internal controls is built by its management integrity. By knowing the management integrity, it is expected that auditors will be more aware in planning their audit which will affect†¦show more content†¦Limitations The research was done based on random data from four big accounting firms. There is no further explanation of how random the sample being chosen; whether the researches differentiate the data based on the clients’ industry or merely random. Moreover, it is questionable whether 54 random samples can really represent hundreds or even thousands of clients. We assume that the clients of the big accounting firms would be big companies as well regarding to the audit fee. Therefore, the results might be different if the data was taken from smaller audit/ accounting firms or smaller audited companies. The difference here does not mean the correlation between MI and audit planning, PTE, and misstatements detection will be positive; instead, it merely means that the indicator number of the correlation might change. Moreover, the authors pointed out that the clients of Big 4 audit firms were dominantly technology oriented, which means an industry with a higher than normal rate of fraud. Therefore, the procedures may differ from those used in other industries. Because of the nature of the data, the authors were unable to identify individual auditors and to communicate the types of Board of directors were involved or what management and ownership relationships exited in the firms being audited. However, it should be noted that despite the results are generally acceptable in the real world, yet anShow MoreRelatedWhy Do An Audit Free Of Interference From Management? Essay946 Words   |  4 Pagesfinancial interest in that firm that is being audit. The auditor must have integrity and objective in is approach to the audit process. As an accountant you must be morally strong people will test you moral but you have to be able to say no matter what the outcome will be. Independent mean to be able to do an audit free of interference from management, to be Independent from anyone who might have some interest in the business. 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