The Auditor must be qualified to understand the criteria used and must be competent to know the types and amount of evidence to accumulate to reach the proper conclusion after the evidence has been examined. The competence of the individual performing the audit is of little value if he or she is biased in the accumulation and evaluation of evidence.
The user may go to the business premises to examine records and obtain information about the reliability of the statements. There is considerable legal precedent that management is responsible for providing reliable information to users.
Assurance services are independent professional services that improve the quality of information for decision makers.
In the audit of historical financial statements, management asserts that the statements are fairly stated in accordance with applicable US or international accounting standards. For an audit of internal controls over financial reporting, management asserts that internal controls have been developed and implemented following well-established criteria. For a review of historical financial statements, management asserts that the statements are fairly stated in accordance with accounting standards which are the same as for audits. For attestations on information technology, management makes various assertions about the reliability and security of electronic information. CPAs provide numerous other attestation services and many of these are natural extensions of the audit of historical financial statements as users seek independent assurances about other types of information.
The operational audit evaluates the efficiency and effectiveness of any part of an organization's operating procedures and methods.
A compliance audit is conducted to determine whether the auditee is following specific procedures, rules or regulations set by some higher authority. Some examples may include determining whether accounting personnel are following procedures prescribed by the controller, review wage rates for compliance with minimum wage laws, and examine contractual agreements with bankers and other lenders to be sure the company is complying with legal requirements.