The role of the auditor in evaluating the misstatements discovered in the financial statements in accordance with INTOSAI Standard 1450 - Applied Research in the General Company for Grain Processing

Abstract

Often, auditors face a problem in evaluating the misstatements discovered in the financial statements from the recent extent of being material or not, and the limits of the auditor's responsibility for this evaluation. This requires clarification of the auditor's responsibilities and the evaluation mechanisms. This study gained its importance from shedding light on the responsibilities of the auditor and their types, and that shed light on the methods of evaluation of the misstatements discovered according to the INTOSAI Standard (1450). This study aims to explain the concept of misstatements and their types, to identify the methods of evaluating the misstatements discovered in the financial statements, as well as to explain the auditor's responsibilities, specifically the responsibility for evaluating the discovered misstatements. In the practical aspect, the two researchers relied on the accounting records and financial statements of the General Company for Grain Processing for the years (2011, 2012, 2013) in diagnosing misrepresentations. This study concluded several conclusions, the most important of which are the existence of a distortion in the process of recognizing the revenue from the sale of flour, as well as the existence of a distortion in the classification of revenues from the sale of bran from private mills. The study sets several recommendations, the most important of which is the need to familiarize auditors with the responsibilities entrusted to them, the necessity to amend the restrictions on recognition of flour sales revenues, as well as to amend the classification of revenues from the sale of bran from private mills.

Keywords

Often, auditors face a problem in evaluating the misstatements discovered in the financial statements from the recent extent of being material or not, and the limits of the auditor's responsibility for this evaluation. This requires clarification of the auditor's responsibilities and the evaluation mechanisms. This study gained its importance from shedding light on the responsibilities of the auditor and their types, and that shed light on the methods of evaluation of the misstatements discovered according to the INTOSAI Standard, 1450. This study aims to explain the concept of misstatements and their types, to identify the methods of evaluating the misstatements discovered in the financial statements, as well as to explain the auditor's responsibilities, specifically the responsibility for evaluating the discovered misstatements. In the practical aspect, the two researchers relied on the accounting records and financial statements of the General Company for Grain Processing for the years, 2011, 2012, 2013 in diagnosing misrepresentations. This study concluded several conclusions, the most important of which are the existence of a distortion in the process of recognizing the revenue from the sale of flour, as well as the existence of a distortion in the classification of revenues from the sale of bran from private mills. The study sets several recommendations, the most important of which is the need to familiarize auditors with the responsibilities entrusted to them, the necessity to amend the restrictions on recognition of flour sales revenues, as well as to amend the classification of revenues from the sale of bran from private mills.