04-22-2010, 12:28 AM
A.A.
This is a very delicate issue and there is a thin line to keep the things within the limits of auditors' role while making recommendations in his ML.
The recommendations where auditor is not supposed to fall under the "Management Role" can be given with reference to particular observations emanating from such audit. Auditor cannot engage his-self in management functions and decisions and simply suggesting something does not bring him under these brackets.
For example auditor cannot design an IT system for its audit client; he cannot even sale and/or implement a system at audit client even if he has such a system for sales to his consultancy clients. Yet if he finds that IT systems already in place are outdated and are not meeting the reporting and information requirements he can highlight such matter in his communications and can also recommend as to which generally available ERPs or systems would be more suitable for the organization on which managment can ponder on for the smooth operations and meeting of the information needs. Even by doing so, he cannot offer his own ERP or system for sales to the audit client unless he dis-associates his-self from such audit engagement.
For the time being, in Pakistan such strict directives are more emphasized for listed sector only.
So, there is a difference between advising in the capacity of an auditor and in the capacity of a consultant or advisor. This thin line has to be watched carefully.
Regards,
This is a very delicate issue and there is a thin line to keep the things within the limits of auditors' role while making recommendations in his ML.
The recommendations where auditor is not supposed to fall under the "Management Role" can be given with reference to particular observations emanating from such audit. Auditor cannot engage his-self in management functions and decisions and simply suggesting something does not bring him under these brackets.
For example auditor cannot design an IT system for its audit client; he cannot even sale and/or implement a system at audit client even if he has such a system for sales to his consultancy clients. Yet if he finds that IT systems already in place are outdated and are not meeting the reporting and information requirements he can highlight such matter in his communications and can also recommend as to which generally available ERPs or systems would be more suitable for the organization on which managment can ponder on for the smooth operations and meeting of the information needs. Even by doing so, he cannot offer his own ERP or system for sales to the audit client unless he dis-associates his-self from such audit engagement.
For the time being, in Pakistan such strict directives are more emphasized for listed sector only.
So, there is a difference between advising in the capacity of an auditor and in the capacity of a consultant or advisor. This thin line has to be watched carefully.
Regards,
