File Name: types of audit and auditor in ethiopia .zip
- The development of internal auditing in Ethiopia: the role of institutional norms
- Overview of Auditing
- The General Concept of Auditing in Ethiopia by Kasahun Gilo
- Types of Audits: 14 Types of Audits and Level of Assurance
Audit , Types of Audit. The audit is an art of systematic and independent review and investigation on certain subject mater including financial statements, management accounts, management reports, accounting records, operational reports, revenues reports, and expenses reports, etc. The result of reviewing and investigation will be reported to shareholders and other key internal stakeholders of the entity for their decision making or others purpose as they needed. For example, the statutory audit report is submitted to the regulator or authority like the tax department, the central bank, or the security authority. The audit is classified into many different types and levels of assurance according to the objectives, scopes, purposes, and procedures of how auditing is performed.
The development of internal auditing in Ethiopia: the role of institutional norms
There is no universally accepted definition of auditing. The process of auditing professionalization in Ethiopia appears to exhibit distinct Patterns during the three epochs when the state followed capitalist-oriented pre , Communist Communist through to , and then capitalist-oriented onwards ideologies.
Auditors in Ethiopia are classified in to external Independent auditors which are performed by certified and authorized private auditors, internal auditors and government auditors. The Commercial Code of Ethiopia contains articles that are related to the auditing practice in Ethiopia. There are also different types of auditing in Ethiopia. These includes:-Private External auditing, internal auditing,performance auditing,compliance auditing,Investigation auditing,project and contract auditing.
The Office of Auditor General Plays key roll including a development, management and administration of auditing in Ethiopia. It is the responsible organ for auditing in Ethiopia. Generally,there are six pillars that make up a strong financial reporting infrastructure: statutory framework, profession and ethics, education and training, enforcement mechanisms, accounting standards, and auditing standards.
However these pillars are not developed or implemented in Ethiopia resulting in week auditing system or status at all. Auditing In EthiopiaAn overview 1. In early days an auditor used to listen to the accounts read over by an accountant in order to check them Auditing is as old as accounting.
It was in use in all ancient countries such as Mesopotamia, Greece, Egypt. Rome, U. The original objective of auditing was to detect and prevent errors and frauds. Auditing evolved and grew rapidly after the industrial revolution in the 18th century with the growth of the joint stock companies the ownership and management became separate. The shareholders who were the owners needed a report from an independent expert on the accounts of the company managed by the board of directors who were the employees.
The objective of audit shifted and audit was expected to ascertain whether the accounts were true and fair rather than detection of errors and frauds. With the increase in the size of the companies and the volume of transactions the main objective of audit shifted to ascertaining whether the accounts were true and fair rather than true and correct. Hence the emphasis was not on arithmetical accuracy but on a fair representation of the financial efforts.
The later developments in auditing pertain to the use of computers in accounting and auditing. Auditing in Ethiopia Development of Auditing In EthiopiaThe process of auditing professionalization in Ethiopia appears to exhibit distinct Patterns during the three epochs when the state followed capitalist-oriented pre , Communist Communist through to , and then capitalist-oriented onwards ideologies.
This section examines the auditing professionalization processes in the Country during the past periods. It is apparent from the foregoing quote that performance auditing in a rudimentary sense was started for the government system of Ethiopia in the early 20th century explains that the contribution of foreign advisors to the kings of Ethiopia during the period from the s through to the s led to the issuance of government regulations and proclamations.
Some of the proclamations and regulations continue to define or at least strongly influence the legal basis of accounting and audit practice in Ethiopia to this date.
In discussing the contribution of foreign advisors to the development of accounting in Ethiopia, Kinfu considers as initial contributions the role of consultants during the Construction of the Ethio-Djibouti railway in the s and of the legal, military, and foreign affairs advisers in the s. The author then attributes developments of accounting from to the earlys to the Anglo-American legal and financial advisors to Emperor Haile Silassie I.
This was followed by the formation of the Audit Commission by Proclamation No. This marks the start of today's Office of the Federal Auditor General of Ethiopia OFAG , which, amongst other duties, monitors and regulates the accounting and auditing profession in the country.
In about the same time frame, the Ethiopian Highway Authority and Ethiopian Airlines were established. In addition, the Ethiopian Telecommunications Corporation and the Ethiopian Electric Light and Power Authority became autonomous state-owned enterprises. These phenomena led to involvement of foreign companies as partners, financiers or consultants to the Ethiopian state-owned enterprises. Consequently, internal audit was introduced in these enterprises with a view to strengthening internal controls.
As a consequence of the growth of demand for trained manpower in accounting and auditing up to the earlys, the Addis Ababa College of Commerce was established in These institutions have played essential role in the development of the accounting and auditing profession in Ethiopia by producing trained manpower Argaw a;Kinfu Other significant developments in the history of accounting and auditing in Ethiopia took place in the s. The code contains some requirements for financial accounting, reporting, and external auditing of companies that operate in Ethiopia.
Limitations that possibly constrained the code's contribution to the development of accounting and auditing in the nation include that it does not: a specify the accounting standards to be followed in financial reporting; b define the qualifications of an auditor; c require compliance with professional standards on auditing; or d impose an audit requirement upon private limited companies with less than 20 members World Bank This proclamation accorded the OAG greater authority than was provided in the proclamation that established the Audit Commission Argaw a;Kinfu The proclamation has subsequently been revised three times, in times, in , times, in and times, in.
The version of the proclamation is the legal basis for external audit for government organizations in Ethiopia to date of writing. Subsequently, private companies were nationalized and the number of state owned enterprises in the country increased. As a result of these changes, international public accounting firms, i.
Nevertheless, formation of the Audit Service Corporation ASC Government of Ethiopia to conduct external audit of public enterprises was an important landmark in the history of accounting and auditing in this period. This development was a result of the need to fill the gap created by the closure of international accounting firms. Furthermore, internal audit as a separate function appeared during this period in when the Auditor General was mandated by Proclamation No. This proclamation also gave the auditor general the authority to issue minimum requirements for recruitment of internal auditors, provide training to internal auditors, and require reports on internal audit of government organizations As this period is generally considered as a time when the development of accounting and auditing was directly or indirectly constrained, limited achievements were made in terms of development of audit profession.
Post Post was a period when Ethiopia shifted back to a free-market economic system after being structured as a command economy for seventeen years.
This shift led to a number of public enterprises being privatized. The resulting new corporate governance structure in the private sector would be expected to enhance the importance of financial reporting and external auditing.
Change of government and the type of government tend to be important influences on the development of the accounting and auditing profession in ethiopia. The free-market system has been considered as one of the signals of hope for a better future for the accounting and auditing profession.
Matching this expectation, the ethiopian government has been undertaking financial reforms in the areas of financial reporting and internal audit in the public sector. The Commercial Code of Ethiopia contains provisions requiring partnership and corporation Share Company to keep books and accounts, related to corporations specifically about appointment of auditors, competency of auditors, professional secrecy and liabilities of auditors.
Furthermore, the code specifies persons who are founders and beneficiaries of a company or its subsidiary, persons related by blood to the fourth degree, or persons who receive remuneration from company founders it also states that directors are not to engage in auditing that company. Principle of Independence In addition, according to the code, an auditor is liable for breach of professional secrecy, for negligence in the performance of professional services, and for breach of contract.
According to the Commercial Code, auditors are liable to client and third party for losses they cause, for issuing inappropriate report, for failure to inform the law for any offences that they knew were committed by the client that affects the public.
The demand for commercial audit has increased, as the Commercial Code of Ethiopia required the multinational companies to present audited financial statements for renewal of trade license. The Office of Auditor General audits or causes to be audited the accounts of the Federal Government offices and organizations.
On the other hand, the Audit Service Corporation provides auditing services to public enterprises. The private businesses also need audited financial statements for various purposes such as for bank loan and for tax purposes.
Thus, private auditing firms provide auditing, accounting services, tax services, and management advisory services on fee basis primarily to the private businesses. The type of audit conducted by private auditing firms is financial statement audit. You can open a private auditing firm and provide auditing services to the public if you meet the requirements of the Office of Auditor General. The Office of Auditor General issues license to private auditors. However some private organizations and nongovernmental organizations also employ external and internal auditors and undertakes performance audit.
In Ethiopia it is the least developed type of audit. In Ethiopia there is no law which enforces privately owned organizations to undertake performance audit. Auditing involves examination of financial statements, books of accounts and vouchers of a taxpayer by Tax Auditors so as to ascertain whether the taxpayer has accurately considered revenues and expenses when determining the taxes shown in the declarations as per the requirements of the tax laws.
It also involves other approaches such as observation of premises, direct monitoring of receipts in cash businesses, use of mark-up techniques and analysis of key ratios.
The overall objective is to improve the compliance of taxpayers, whether they declare the correct amount of tax and paid at the right time.
The expectation by a taxpayer of an audit should have a deterrent effect and encourage the taxpayer to declare as far as possible a credible tax return. It also improves the taxpayer's understanding and awareness of the relevant taxes. Types of Auditors in Ethiopia internal AuditorsThe history of the development of internal auditing in Ethiopia dates back to about the middle of the s just about the time when internal audit was evolving as an organized profession in the Untied States.
The same Proclamation mandated the then Ministry of Finance to audit other budgetary institutions as a measure of internal control over the financial operations of the budgetary institutions. It appears that this early practice of internal auditing as per Procl. The latter part of the s witnessed the establishment of internal audit functions in key public sector institutions such as the national defense, education, road construction, and other non-budgetary public sectors, which included the Ethiopian Airlines, Telecommunication and the financial sector consisting of the modern layer of the Ethiopian economy.
These institutions in one way or the other had external links or financing operations, which created awareness of the need for internal controls to sectarian appropriate financial management and to safeguard organizational assets.
The period of the early s, marked the introduction of a budgetary system in government. The commencement of an annual public budget in for the first time in the history of the country ushered in a system of financial administration based on the annual budget with all its attendant requirements for strengthened internal control in the budgetary agencies. This entailed the formation of internal audit as an integral apart of the budgetary internal control system.
The establishment at the time of the Addis Ababa Commercial School and the Addis Ababa University College supplied with limited but better informed manpower, for some key institutions in the economy. Current status of Internal Auditing In Ethiopia The Scope and Practice of Internal Auditing in EthiopiaIn order to assess the state of internal auditing in the country as a basis for further action to strengthen the function, a survey was conducted by the Office of the Auditor General in The main purposes were to determine the service quality, methodology and educational and skill content as well as organizational structure of internal auditing.
The survey was carried out by means of questionnaires developed by an ad hoc committee. Although the questions were widely distributed the analysis was based on the responses obtained from different ministries, government departments and 50 public enterprises.
The survey indicated that there was a serious lack of internal audit education and training. An accounting background has been seen as the most important requirement for entry into the internal auditing work.
Such a requirement, however, does not provide internal auditors with the knowledge of adequate analytical tools necessary for carrying out their professional responsibilities.
Hence the findings of the survey at the time indicated that the scope and professional content of internal auditing work was severely limited to: 1 Low-level financial and compliance audits, 2 Pre-audit 3 Non-audit work such as witnessing the hand-over of stores, cash and personnel transfersThe prevalence of such limited scope of work of internal auditing was attributed to a number factors, which included: 1 The low level education, training and experience of internal auditors 2 The lack of management awareness about the functions and contributions of internal auditing 3 The prevalence of weak internal control systems in organizations in which internal audit is an integral part.
Overview of Auditing
The purpose of this paper is to examine the extent to which institutional norms determine attributes of internal audit practices and how institutional changes explain the development of these practices. The authors employed a qualitative research approach based on archival analysis and interview evidence. Furthermore, innovative introduction of internal audit practices originate within individual organizations and eventually get institutionalized through diffusion. Such innovations are associated with organizational size, top management characteristics, internal audit advancement in technology, and exogenous input from the external environment. The institutional change perspective enables explaining how new internal audit approaches are introduced to supplant old ones.
Skip to search form Skip to main content You are currently offline. Some features of the site may not work correctly. DOI: Mula and K. Mula , K. Purpose - The purpose of this paper is to examine the extent to which institutional norms determine attributes of internal audit practices and how institutional changes explain the development of these practices. View PDF.
Without question, the independent audit function plays an important role in both business and society. Numerous third parties, including investors, creditors, and regulators, depend on the competence and professional integrity of independent auditors. Economic decisions are typically based upon the information available to the decision maker. To obtain the most benefit, users should have economic information that is both relevant and reliable. This need for relevant and reliable financial information creates a demand for accounting and auditing service.
The General Concept of Auditing in Ethiopia by Kasahun Gilo
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Types of Audits: 14 Types of Audits and Level of Assurance
An auditor is not bound to be defective, or to approach his work with suspicion, or with the foregone conclusion that there is something wrong. He is a watchdog but not a bloodhound. He is justified in believing servants of the company and is entitled to rely upon their representations, provided he takes reasonable care. An auditor is not bound to assume when he comes to do his duty that he is dealing with fraudulent and dishonest people if circumstances of suspicion arise he has to probe them to the bottom.
Все, что угодно, только не шифр, не поддающийся взлому. Стратмор сурово посмотрел на. - Этот алгоритм создал один самых блестящих умов в криптографии.
Правое запястье в гипсе. На вид за шестьдесят, может быть, около семидесяти. Белоснежные волосы аккуратно зачесаны набок, в центре лба темно-красный рубец, тянущийся к правому глазу. Ничего себе маленькая шишка, - подумал Беккер, вспомнив слова лейтенанта. Посмотрел на пальцы старика - никакого золотого кольца. Тогда он дотронулся до его руки. - Сэр? - Беккер легонько потормошил спящего.