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The Audit Function - An Overview

The document provides an overview of the audit function including: 1) Defining an audit as a systematic process of obtaining and evaluating evidence to determine the degree of correspondence between assertions and established criteria. 2) Stating that audits should be done by competent and independent persons. 3) Describing generally accepted auditing standards including general standards around competency, independence, and due care as well as fieldwork and reporting standards.

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37 views9 pages

The Audit Function - An Overview

The document provides an overview of the audit function including: 1) Defining an audit as a systematic process of obtaining and evaluating evidence to determine the degree of correspondence between assertions and established criteria. 2) Stating that audits should be done by competent and independent persons. 3) Describing generally accepted auditing standards including general standards around competency, independence, and due care as well as fieldwork and reporting standards.

Uploaded by

fauziyah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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The Audit

Function --
An Overview

(Attestation)
Auditing Defined
#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,
Auditing Defined
#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
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
 InternalAudits
 Operational Audits
Types of
Audit Reports

Corresponde
nce
YES

YES, but...

NO

DON’T KNOW
Types of
Audit Reports
Correspond
ence
YES  Unqualified Opinion
• Standard Report
• Modified Report
YES, but...  Qualified Opinion
• Scope Qualification
• GAAP Departure
Qualification
NO  Adverse Opinion

DON’T  Disclaimer of Opinion


KNOW

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