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Auditing

The document discusses the key elements of an audit. It explains that an audit involves a systematic process following logical steps. It involves three parties - shareholders, managers, and auditors. The auditors provide assurance on a specific subject matter for the entity, such as financial data, systems, or processes. The auditors collect evidence, such as financial and non-financial data, and evaluate it against established criteria like accounting standards. Ultimately, the auditors express a professional opinion providing reasonable assurance about the entity's financial statements.

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39 views73 pages

Auditing

The document discusses the key elements of an audit. It explains that an audit involves a systematic process following logical steps. It involves three parties - shareholders, managers, and auditors. The auditors provide assurance on a specific subject matter for the entity, such as financial data, systems, or processes. The auditors collect evidence, such as financial and non-financial data, and evaluate it against established criteria like accounting standards. Ultimately, the auditors express a professional opinion providing reasonable assurance about the entity's financial statements.

Uploaded by

kanishka
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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 Systematic process

 Three-party
relationship
 Subject matter
 Evidence
 Established criteria
 Opinion
1. Systematic Process
Auditing is a systematic and scientific process that follows
a sequence of activities, which are logical, structured, and
organized.

2. Three-party Relationship
The audit process involves three parties: shareholders,
managers, and auditors.

3. Subject Matter
Auditors give assurance on a specific subject matter.
However, the subject matter may differ considerably, such
as – data, systems or processes, and behavior.
4. Evidence
The auditing process requires collecting the evidence, that
is, financial and non-financial data, and examining thereof.

5. Established Criteria
The evidence must be evaluated regarding established
criteria, which include International Accounting Standards,
International Financial Reporting Standards, Generally
Accepted Accounting Principles, industry practices, etc.

6. Opinion
The auditor has to express an honest and professional
opinion as to the reasonable assurance of the entity’s
financial statements.

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