Post-Implementation Challenges of the Model Audit Rule Research Paper

Post-Implementation Challenges of the Model Audit Rule - Research Paper Example Audit theory and practice also covers other areas that include the basis of audit opinion, legal liability of the auditors, and examination of frauds, audit evidence, and audit programs. For an audit to be successful, the above factors have to be analyzed critically so that the auditors achieve clarity (Reed, Shedd, Morehead, and Pagnattaro, 2009, p. 39). The auditors have to ensure that they carry out the work professionally in accordance with the laid down policies and procedures. They have to ensure that they follow the guidelines which include the auditing standards that guide them during the process of the audit. The client entrusts the auditors with the responsibility of carrying out a substantive test meant to evaluate the subject matter to provide an assurance to the intended user concerning the subject matter. The auditor faces many challenges before the audit process, during the auditing process, or after the process (Moeller, 2004, p. 39). Auditing relies on sampling and e stimation of values which makes the credibility of the process doubtful. Lack of sufficient information is one of the challenges that auditors face during the process hence making the process difficult to accomplish within the given time. International Auditing Standards requires that auditors obtain a lucid understanding of the company being audited and its environment. This understanding of the internal control system will help them identify misstatements that are material in the statements that may arise due to fraud or error. To avoid post audit problems that may arise, the auditors have to analyze the process that the company adopts critically to identify business risks. Post audit challenges are the challenges that auditors face after completion of the audit process. These challenges make the process an excellent training for the executives. The Model Audit Rule is a collection of accounting standards that govern the audit process. It ensures that auditors ensure financial sta bility and proper governance to the various companies who consult them for their services. An internal control financial report is a basic requirement in the Module Audit Rule to ensure that professionals formulate controls. It also ensures that controls are operating as intended (Vasarhelyi, 2005, p. 77). The main role of this rule is to enhance oversight of financial stability of various insurance companies. It has the responsibility of setting the guidelines that govern auditor’s independence and create rules for the audit committee. Influence of legal, regulatory, and social environments on audit theory and practice Legal, regulatory, and social environments have absolute impact on audit theory and practice. The legal environment entails criminal liabilities for auditors, auditor’s liability to clients and third parties, and their responsibility to detect frauds and errors. This is a tremendously vital part during the audit process since it governs the conduct of t he auditor during performance of the audit. The legal environment is particularly vital in reduction of post implementation challenges that will arise after the Model Audit Rule is introduces (Cheeseman, 1997, p. 79). A detailed analysis of the legal environment concerning the Model Audit Rule is necessary to ensure that companies and auditors understand the requirements of the rule. This will cut the cost of the companies and reduce