The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of...

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The Audit Function -- An Overview (Attestation)

Transcript of The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of...

Page 1: The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of objectively obtaining and evaluating evidence regarding assertions.

The Audit Function --

An Overview

(Attestation)

Page 2: The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of objectively obtaining and evaluating evidence regarding assertions.

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

Page 3: The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of objectively obtaining and evaluating evidence regarding assertions.

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.

Page 4: The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of objectively obtaining and evaluating evidence regarding assertions.

Generally Accepted Auditing Standards

General Standards• Competency (Training and

proficiency)

–In criteria

–In obtaining and evaluating evidence

–In reporting

• Independence

• Due care

Page 5: The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of objectively obtaining and evaluating evidence regarding assertions.

Generally Accepted Auditing Standards

Fieldwork Standards• Planning and

supervision

• Internal control structure

• Sufficient, competent evidence

Plan

Page 6: The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of objectively obtaining and evaluating evidence regarding assertions.

Generally Accepted Auditing Standards

Reporting Standards

• Existing criteria (e.g. generally accepted accounting principles)

• Inconsistency

• Inadequate disclosure

• Expression of Opinion

Page 7: The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of objectively obtaining and evaluating evidence regarding assertions.

Other Types of Audits

Compliance Audits• Financial Audits

• Performance Audits Internal Audits Operational Audits

Page 8: The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of objectively obtaining and evaluating evidence regarding assertions.

Types of Audit Reports

Correspondence

YES

YES, but...

NO

DON’T KNOW

Page 9: The Audit Function -- An Overview (Attestation). Auditing Defined #1 A systematic process of objectively obtaining and evaluating evidence regarding assertions.

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