Audit process, Auditing

Assignment Help:

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.


Related Discussions:- Audit process

Disclosure requirements - investment, Disclosure Requirements - Investment ...

Disclosure Requirements - Investment In common terms, the following items have to be disclosed in the concern to all investments: (a) The accounting policies about:-

Management representations as source of audit evidence, Management Represen...

Management Representations as a Source of Audit Evidence International Standard on Auditing as abbreviated ISA 580 Management Representations gives guidance and standards on t

Relevance - sources of evidence, Relevance - Sources of evidence The a...

Relevance - Sources of evidence The auditor obtains evidence either through compliance testing of the internal controls or through substantive tests of the information contain

Ias 37 provisions and contingent assets, IAS 37 Provisions, Contingent Asse...

IAS 37 Provisions, Contingent Assets and Contingent Liabilities IAS 37 was mattered in order to deal along with the subjective area of provision and to prevent the requiremen

Briefly explain different types of audit, Government has recently set up a ...

Government has recently set up a parastatal body responsible for waste management in Mauritius. The management is unsure as to the need for an audit and the setting up of an intern

Records kept by auditor, Records kept by AUDITOR of procedures applied, tes...

Records kept by AUDITOR of procedures applied, tests performed, the information obtained and pertinent conclusions reached in the course of the AUDIT. (2) Any records developed by

King&queen, a) Would King & Queen be liable to EFL? Provide specific case ...

a) Would King & Queen be liable to EFL? Provide specific case references to support your answer.

Auditor, auditor is a watch dog not a blood hound

auditor is a watch dog not a blood hound

Audit evidence, State four factors considered determining sufficiency of a...

State four factors considered determining sufficiency of audit evidence

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd