Audit process, Auditing

Following three frameworks/ concepts are an integral part of the ‘world of auditing' which may be used by auditors throughout their audit engagements.

(i) Overview of the audit process

(a) Identify the key steps in this framework/ concept.

(b) Briefly explain each of the key steps, in your own words.

Ans:

a). Auditing is essentially a practical task. The auditor always needs to reflect the nature of the circumstances of the entity under audit. It is unlikely that any two audit assignments will ever identical. It is however possible to identify a number of standard stages in a typical external audit. These are as follows:

-Audit appointment
- Initial planning

  • Knowledge of the business
  • Risk Assessment
  • Internal control review (procedures)
  • Control procedures (authorities/approvals/segregation of duties)

- Preparation of the audit plan
- Accounting system review
- Analytical review techniques (Compliance procedures-Application of control test procedures) like purchasing are according to the controls established.
- Substantive testing (transaction level procedures)
- Reasonable assurance
- Review of the financial statements (compliance with the standards/material misstatement etc.)
- Preparation and signing of report

(b) First of all an audit is appointed by an organization to audit the books of accounts i.e Audit appointment.

The auditor sends an engagement letter to the client about the scope of the audit which is duly verified by the client. After this the initial planning is done by the auditor to conduct the audit. In this stage the auditor enquires about the business, its environment, its internal control and so on in order to commence the work of audit..

An audit plan is drafted by the auditor which contains the details as to how the audit will be conducted, it procedures and allocation of time to every segment of audit.

An overview of the accounting system in tact is taken by the auditor before the proper startup of audit process to pinpoint any lacking in the present system.

Analytical review is done of the books of accounts followed by the substantive procedures to smooth and organize the audit process.
Review of the financial statements is undertaken and at last the audit is finalized by the auditor.

Posted Date: 3/16/2013 3:45:54 AM | Location : United States







Related Discussions:- Audit process, Assignment Help, Ask Question on Audit process, Get Answer, Expert's Help, Audit process Discussions

Write discussion on Audit process
Your posts are moderated
Related Questions
Sufficiency - Sources of evidence The audit evidence should in total enable the auditor to form an opinion on the financial statements.  Sufficiency is a measure of evidence o

Auditors Responsibilities with regard to related parties ISA 550 Related Parties states which the auditor should perform audit process designed to find sufficient suitable

audit procedure for shares or common stock

Cash and Window Dressing - Building Society Cash Possibility of misappropriation and error usually accompany the handling of cash. Building societies transactions towards



Presentation and Disclosure - Audit of Accounting Estimates An enterprise should involve the following information relating to a discontinuing operation in its financial state

Goodwill and Business Combinations - Intangible Assets Goodwill is the one of most strange of all assets since it cannot be differentiate from the business.  It cannot be sold

Tangible Non Current Assets The verification approach is fundamentally similar in each of these.  Extensive disclosure is utilized in most countries and IAS 16 Property Equipm

what is the role of audit trainee in managing the discrete assignment?