What is the substance-over-form concept in auditing, and what exactly does it require? What responsibility do auditors have when a client violates this principle?
by 
justus
ANSWERS: 4
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Substance over form emphasizes the economic substance of an event even though its legal form may provide a different result. I saw one definition that gave this example...If it is a goat in substance but in its legal form it is a dog, it is still a goat! An auditors responsibility is to inform the audit partner of the violation, inform the audit committee of the violation, document the violation in detail, and then the firm must decide whether to continue the engagement if the client does not adhere to GAAP. I am sure there is more to this answer but, at 6 in the morning this is all I can think of.
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anonymous, i totally agree with you.for me,auditors need to act as whistleblower if the client didn't accept our recommendation.
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What is the substance-over-form concept in auditing, and what exactly does it require? What responsibility do auditors have when a client violates this principle?
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substance over form is an accounting principle use to ensure that the finacial statments reflects the complet relevant and accurate picture of the transactions and events.the responsibility is to inform the audit partner of the violation
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