PART B

Name : Nor Amirah Bt Mohd Faris (4082009131)

AUDIT CHALLENGES FACED BY THE AUDITOR

PROJECT OVERVIEW

Introduction On Project - Challenges give many impact to the auditing profession. Problem Statement - Audit challenge will not only give harm for the company and auditor, but it also gives a bad impact for the third party - An auditor should give true and fair view on the financial statement to avoid failure faced by the all the related users.

OBJECTIVE OF THE PROJECT

- To improve auditor profession and integrity while doing auditing.
- To be more trustworthiness and be more reliable and relevant while doing audit conduct. - Learn from the past experience and past mistake occurred during the financial crisis.

LITERATURE REVIEW

- Financial scandals have always been one of the

major reasons for change in the company law and a prove to show that the auditor have fallen below the expected standards - If a company were to fail within certain months after being audited, the auditors are blamed for conducting an inferior audit.

METHODOLOGY
Research method - Analysis and researches through the environment faced by my senior auditor. - Journal(Internet).

FINDING
Low perceived value of the audit function. For small audit clients of the auditing is viewed as o waste of money Audit function can be explained by the agency theory For most private company the director and shareholder are the same person.

FINDING
Evaluation of auditors performance. Unfair judgment and unfair evaluation towards audit performance because public do not have the necessary knowledge and ability to evaluate the quality of an audit leading to a situation of failing to differentiate between the quality of one audit versus one another. Public learn from the past experience. An example of the case of Transmile Air Services occurred in 2007. The public see the entire mistake come from an auditing. They claimed that the auditor have failed to perform their work diligently whenever a corporate financial scandal hits the news.

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COMPETITION FOR HUMAN CAPITAL

Human capital is the most important and essential asset and sourcing for real talent is posing to be great challenge for the auditing industry Now a days, local audit firm face a tough time in recruiting qualified auditing personnel as they are paid much better in countries like Singapore, China and the Middle East Fresh accounting graduates claims that auditing is a less attractive profession due to its long working hours and less lucrative remuneration.

AUDIT FEES VERSUS AUDIT QUALITY

Audit services for public companies in Malaysia have been dominated by the four international audit firms (Big 4) which is KPMG, Deloitte KassimChan, PriceWaterhouseCoopers and Ernst & Young. The issue of low audit fees resulting from lowballing has been a major concern of the auditing profession. Price war among audit firms will give bad impact and negative implications on audit quality Auditors are likely to reduce audit procedures to ensure necessary profit margin.

CONCLUSION

Stronger regulation may not only solution in promoting better audit practice in Malaysia. Stressing on a higher moral value in audit lessons and training could be the accompanying path worthy of involvement of various interested parties.