The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of...
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Transcript of The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of...
The Audit Function --
An Overview
(Attestation)
Auditing DefinedAuditing Defined#1 #1 A systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users.
Auditing Concepts Committee,American Accounting Association, “Report of the Committee on Basic Auditing Concepts,” The Accounting Review, 1971
Auditing DefinedAuditing Defined#2#2
The accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria. Auditing should be done by a competent independent person.
Arens & Loebbecke, Auditing, An Integrated Approach 7th Edition - Prentice Hall, 1997.
Generally Accepted Auditing Standards
General Standards• Competency (Training and
proficiency)
–In criteria
–In obtaining and evaluating evidence
–In reporting
• Independence
• Due care
Generally Accepted Auditing Standards
Fieldwork Standards• Planning and
supervision
• Internal control structure
• Sufficient, competent evidence
Plan
Generally Accepted Auditing Standards
Reporting Standards
• Existing criteria (e.g. generally accepted accounting principles)
• Inconsistency
• Inadequate disclosure
• Expression of Opinion
Other Types of Audits
Compliance Audits• Financial Audits
• Performance Audits Internal Audits Operational Audits
Types of Audit Reports
Correspondence
YES
YES, but...
NO
DON’T KNOW
Types of Audit Reports
Unqualified Opinion• Standard Report• Modified Report
Qualified Opinion• Scope Qualification• GAAP Departure
Qualification Adverse Opinion
Disclaimer of Opinion
Correspondence
YES
YES, but...
NO
DON’T KNOW