Auditing Essay Example | Topics and Well Written Essays - 2000 words - 3

Auditing - Essay Example The Cheaphol plc is a tour operator, who had been performing its business excellently until a fire at a foreign hotel killed their ten guests on 28th May, 2010. The Winters & Co audited the firm during May 2010 and auditor’s unqualified report was signed on 5th June 2010. The submitted report was clean audit report which did not contain any references to the financial difficulties. The ISA has framed certain duties and responsibilities for auditors. According to Sharma, the most important duty of an auditor is that he/she should do his/her work with â€Å"due diligence, intelligence and dedication† (Sharma, 165). In the case of Winters & Co. they could complete their audit work successfully by disclosing all material facts till the date of audit report. It is necessary to note that the disaster occurred on 28th May 2010 and Winters & Co. signed the unqualified report on 5th June 2010. It clearly reflects that there was only a time gap of six days in between occurrence of the disaster and report submission. Similarly, it must also remember that the company did not release any report out of the press until they were questioned by officials. The case study precisely points out that this news leakage and subsequent holiday cancellations led the company to huge financial crises. Therefore, it is identified that Cheaphol’s financial position was safe t ill the date of audit report submission. In other words, Cheaphol’s financial crises began after the course of audit work of Winters & Co. Although some of the audit staff came to hear the catastrophes regarding the company, they could not corroborate the matter. In addition, the audit team had no sufficient time for conducting a detailed investigation regarding the newly acquired information since they were needed to submit the audit report immediately in order to assist the Cheaphol plc to make negotiations with Alltan’s bankers. It is one of the primary responsibilities of the