There are four main types of auditors:
1) External auditors perform independent reviews of a company's financial records
2) Internal auditors provide independent evaluations of a company's financial and operational activities
3) Government auditors are employed by state and local government agencies
4) Forensic auditors are trained to detect, investigate, and deter fraud and white-collar crime.
IT CONTAINS BASICS OF AUDIT AND AUDITOR
MEANING OF AUDIT, DEFINITION, ORIGIN AND DEVELOPMENT, TYPES OF AUDIT, DIFFERENCE BETWEEN ACCOUNT AND AUDIT, AUDITOR
IT WILL HELP THE STUDENTS TO UNDERSTAND THE BASIC OF AUDIT.
IT CONTAINS BASICS OF AUDIT AND AUDITOR
MEANING OF AUDIT, DEFINITION, ORIGIN AND DEVELOPMENT, TYPES OF AUDIT, DIFFERENCE BETWEEN ACCOUNT AND AUDIT, AUDITOR
IT WILL HELP THE STUDENTS TO UNDERSTAND THE BASIC OF AUDIT.
This presentation explains about the meaning as well as various types of audit report which an auditor has present in his books of accounts for the sake of the company's shareholders and various other groups.
An exercise whose objective is to enable auditors to express an opinion on whether the financial statements give a true and fair view (or equivalent) of the entity’s affairs at the period end and of its profit or loss (or income and expenditure) for the period then ended and have been properly prepared in
accordance with the applicable reporting framework (e.g. relevant legislation and applicable accounting standards) or where statutory or other specific requirements prescribe the term, whether the financial statements “present fairly”.
Audit Evidence is one of the International Standards on Auditing. -It serves to expect the auditor to obtain audit evidence from an appropriate mix of tests of control systems and substantive tests of transaction and balances.
This is a step by step plan of the auditing work to be performed, specifying the procedure to be followed in the verification of each item in the financial statements, and giving the estimated time required’.
BCom Auditing and Corporate Governance Notes-1.pdfMystatus4
In this Slides we have Provided BCom Auditing and Corporate Governance most important Questions and Answers with some important Points and notes which helps you to score good marks.
If you want more information regarding this topic then please visit our sites https://www.thetreasurenotes.in and https://www.proedunotes.in
This presentation explains about the meaning as well as various types of audit report which an auditor has present in his books of accounts for the sake of the company's shareholders and various other groups.
An exercise whose objective is to enable auditors to express an opinion on whether the financial statements give a true and fair view (or equivalent) of the entity’s affairs at the period end and of its profit or loss (or income and expenditure) for the period then ended and have been properly prepared in
accordance with the applicable reporting framework (e.g. relevant legislation and applicable accounting standards) or where statutory or other specific requirements prescribe the term, whether the financial statements “present fairly”.
Audit Evidence is one of the International Standards on Auditing. -It serves to expect the auditor to obtain audit evidence from an appropriate mix of tests of control systems and substantive tests of transaction and balances.
This is a step by step plan of the auditing work to be performed, specifying the procedure to be followed in the verification of each item in the financial statements, and giving the estimated time required’.
BCom Auditing and Corporate Governance Notes-1.pdfMystatus4
In this Slides we have Provided BCom Auditing and Corporate Governance most important Questions and Answers with some important Points and notes which helps you to score good marks.
If you want more information regarding this topic then please visit our sites https://www.thetreasurenotes.in and https://www.proedunotes.in
What are the major steps in a financial statement audit.pdfRathnakarReddy17
A financial statement audit is a formal examination of a company's financial statements. Its goal is to assess whether financial statements fairly and substantially accurately depict business operations and financial situation in compliance with the Generally Accepted Accounting Principles (GAAP) published by the Financial Accounting Standards Board. The income statement, balance sheet, statement of Cash Flow Budgeting and Forecasting in Washington, and other supporting disclosures are all specifically examined by the auditor for accuracy.A financial statement audit must be performed in accordance with GAAP by an impartial external auditor.
Auditing is the process of verifying the validity of a company's various financial statements. Many renowned experts have defined auditing from their own perspectives. Below are the thoughts of some of the authors who commented on their respective opinions.
7 Steps to Conducting a Financial Audit | The Enterprise WorldTEWMAGAZINE
Overview of the financial audit process: 1. Preparing for the Audit 2. Assessing Internal Controls 3. Gathering and Reviewing Financial Data 4. Testing Financial Transactions and Balances 5. Summarizing Findings and Preparing Audit Reports 6. Post-Audit Follow-Up 7. Wrapping up
FUNCTIONS OF AUDIT - Following are the most important functions o.pdfanupamele
FUNCTIONS OF AUDIT :-
Following are the most important functions of an audit.
1. Study The Accounting System :-It is the basic function of auditing. In order to determine the
nature, timing and extent of the audit procedures auditor should study the accounting system.
2. Internal Control System :-
It is a process which determines that management policies are carried out according the
accounting principles. This system is very useful to safeguard the interest of the enterprise. The
auditor determines the effectiveness of this system. Our company uses to ensure the proper
accounting principles are followed by doing auditing.
3. Vouching :-
This function is essential to determine the accuracy of accounting record. This checking the
vouchers with supporting documents which support and prove the business transactions. All
entries in books of accounts are made on the basis of relevant vouchers.
4. Verification Of Assets :-
It is the function of auditing that it should verify the assets of the business. It is concerned with
the determination of value, ownership and possession of business asset. The auditor can check
the existence of asset.
5. Legal Requirement :-
It is the function of auditing to verify that statements are prepared under the legal requirements
or not. There are various laws like company andincome tax ordinance which are introduced by
the govt.
6. Liabilities Verification :-
The liabilities of the business can be verified from the books of accounts. The auditor can write
a letter to the creditors for the verification of liabilities. The auditor must receive the certificate
from the management in this regard.
7. Capital And Revenue :-
Auditing should make difference between capital and revenue items. The capital items are
compared to note the financial position of the business. The revenue items are compared to
determine the income. The income and expenses related to many years can be divided in current
and coming year.
8. Valuation Of Liabilities :-
Through auditing value of liabilities can be checked from the books of accounts and other
papers. The auditor can also confirm the value from outside sources. The value of liabilities is
given in the balance sheet by the management but it is the function of auditing which confirms
this value.
9. Valuation Of Assets :-
The management gives the value of assets and auditor can apply the accounting principles to
assess the value of assets. The auditor critically examines and takes help from the expert.
10. Reporting :-
Auditing important function is reporting. Auditor is an independent person and it is his duty to
submit his report in writing. If he is satisfied he can present clean report otherwise he can give
qualified report.
Elements of the Generally Accepted Auditing Standards (GAAS)
The generally accepted auditing standards (GAAS) are the standards you use for auditing private
companies. There are 3 elements of GAAS.
General Standards: The first three GAAS are general standards which ad.
What are the major steps in a financial statement audit.pdfsarikabangimatam
A Financial Statement Preparation in Delaware consists of three main written records: the cash flow statement, the income statement, and the balance sheet. Companies issue financial statements to provide information about their financial performance and well-being. Financial statements are audited before they are released to the public. Verifying conformity with various regulations is done through auditing.
What is the procedure for financial statement audit.pdfRathnakarReddy17
The purpose of a financial statement audit is to add credibility to the reported financial condition and business performance. Annual reports must be submitted by all publicly traded corporations and are subject to SEC audits.Similarly, lenders typically require audits of the financial statements of the companies they finance. Suppliers may also require audited Financial Statement Preparation in New York before granting trade credit (usually only if the amount of credit requested is substantial).
1. Types of auditor: Achievement
An auditor is a person who reports on the accounts of an undertaking or enterprise.
Auditors can be classified under four headings. They are:
External Auditors: An external auditor perform independent third-party
reviews all the financial records of a company or corporation. He evaluates all
Accounting payroll and purchasing records, as well as any documents related to
investment, stock on loans.
Internal Auditors: An employee of a company changed with providing
Independent and objective evaluation of the company financial and operational
business activities. Including its corporate governance, partnership government
agencies.
Government Auditors: Auditors employed by the government are called
government auditors. They are employed by state and local agencies. Because they
internally.
Forensic Auditors: They are employed by the corporation, government
Agencies public accounting firms, and consulting and investigative services firms.
They are trained in detecting, investigating, and deterring fraud and white-collar
crime.
Generally accepted Auditing Practice:
Auditing is a process by which a competent independent person accumulates and
evaluates evidence about various assertions contained in financial statement of an entity
for the purpose of determining and reporting the e quality of disclosure of financial
2. information judging them against how it is found out Auditing is not sweaty search with
any foregone conclusion .Nor does it end abruptly with any accidental catch in the audit
mesh. Essentially auditing is a process, a Professional exercise, conforming to the quality
parameters of generally accepted auditing is a process a professional exercise conforming
to the quality parameters of generally accepted auditing Practices. What is “generally
accepted auditing standards” cannot be easily defined. Yet it is important one must have
understanding of what the term may connote. It implies, among other things the
following:
Only knowledgeable and independent person carries out the audit.
In performing audit the works is well planned and supervise.
Sufficient and appropriate audit evidence are gathered and tested before an
opinion is farmed.
Proper judgment is made of financial statements under audit in the light of
professional knowledge of auditor concerning generally accepted
accounting practices, special enactments affecting the financial statement,
pronouncements of professional bodies having bearing on them.
Audit Evidence:
An auditor must gather sufficient and appropriate audits evidenced and test them to make
judgment of opinion. In this, there have two issues:
What evidence will be relevant to assess with greater reliability?
How much evidence is to be obtained?
To obtain sufficient appropriate evidence the auditors have to perform two things:
1. Compliance procedures.
2. Substantive procedures.
3. Compliance procedures:
In big organization, transactions may be voluminous and repetitive .if those transactions
occur systematically within in built checks and balances, it would be unnecessary to
verify all the transactions to assess what theses transactions signify. Quite a few
transactions, if checked would tell what all transactions of the type seek to signify.
Compliance procedures seek to test, those are given bellow:
The Internal control exists.
The internal control is effective.
The internal control has so operated throughout the period of audit with
continuity.
An auditor carries out compliance observation of the system , eliciting responses to his
enquiry form clients, making critical look of the fact against the back drop of control
criteria.
Substantive procedures:
By performing compliance procedures, the auditor finds out the efficiency of internal
control system. If for instance, the internal control system is found to be effective, can
auditor take that all assertions given by the financial statements are true and fair? While
existence of good internal control system adds reliability to audit evidence, in can not
dispense with checking evidence to substantiate data generated within the system .
4. In these transactions communicate one or more of the following assertions in financial
statements viz.
Existence: That an assets/ liability exists.
Rights and obligations: That the enterprise has right over the asset or has
obligation over the liability.
Completeness: That all transactions / asset / liability find place in financial
statements without omission.
Valuation: The monetary values attached to asset or liability is correct or fair.
Measurement: that a transaction is recorded in proper amount. For e.g. freight
paid to bringing machinery is included in transaction pertaining to installation.
Revenue or expense is properly allocated to the period e.g.: per- paid expenses
accrued income.
Disclosure: Data is disclosed according accounting convention statutory
requirement.
Those seven assertions of financial data may be correct or not. A financial statement may
depict a leasehold right as a freehold right. The auditor has to check to get assurance that
these assertions are fairly represented in the financial statements. To do this, performance
substantive procedure.
Test Check:
In big business houses where the number of transaction to be checked is very large and
time at the deposal of the auditor is little, a few transactions may be checked at random.
such a cheek is called test check. All the transaction need not be checked. The method of
checking the accounts will minimize the work of the auditor.
Professor Meig defines:
5. “Testing and test checking means to select and examine a representative sample from a
larger number of similar items”
For example while vouching the credit sales a few transaction say for a week per month
may be checked or the transaction for a few months selected at random may be checked.
Again the auditor may check all the transaction for any month may be checked. If the
transactions so checked are all correct and there is no doubt of any error or fraud.
Therefore the auditor should be very careful in relying upon the test Check. He should
apply these checks if he is fully satisfied that the internal check system prevalent is
efficient and no suspicion arises in his mind.
Precaution to be taken while applying Test Checks:
Entries of every description should be checked.
Selection of entries to be checked should be at random.
Periods and entries selected for the test check should be different at
each audit.
For Example:
The credit sales for the months of July and December were checked during the year
1994. Credit sales for other months except July and December should be checked
for the year 1995.
A large number of entries of the first and the last month of the audit
period should be checked.
The test check should be so arranged that the work done by every
clerk is checked.
6. Test check should be applied to cash book where every transaction
should be checked.