Systems based audit approach, Auditing

Assignment Help:

Systems Based audit approach

The basis of IAS 400, Risk Assessment and Internal Control.

The term systems audit refers to the typical audit approach to medium and large companies and is based on the assumption that such companies have internal control systems which will hopefully constitute a reliable base for the preparation of the accounts. In other words, the characteristic of a systems audit is an examination of internal control.

We have already established that many small companies cannot achieve satisfactory internal control and it is hence clearly futile for the auditor to seek to rely on controls if they don't exist or are patently unreliable. For such enterprises the auditor has no alternative but to carry out a so called 'substantive audit' involving extensive verification of transactions followed by a detailed examination of the balance sheet (verification of assets and liabilities and review of the financial statements).

The contemporary audit approach to reasonably sophisticated companies is therefore to carry out a system-based audit during the course of the accounting year, followed by a balance sheet audit at the year end - if the systems audit work is successful, i.e. the controls prove reliable, the auditor can use his judgement to reduce the extent of the balance sheet work (in no circumstances will the balance sheet work be eliminated entirely!).


Related Discussions:- Systems based audit approach

Ticket Id - EM13490296A06, Will I be able to download immediately once I pu...

Will I be able to download immediately once I purchase this assignment?

Checking consolidation papers, Checking Consolidation Papers The audit...

Checking Consolidation Papers The auditor pays particular concentration to the calculation of: a) Goodwill arising on consolidation and acquisition b) Post-acquisition a

Dealings with directors and other parties, Dealings with Directors and Othe...

Dealings with Directors and Other Parties - Sundry Debtors and Loans Dealings along with directors and other related parties: The auditor's duties are follows as: i. The revi

Audit risk, AUDIT RISK As we have seen many parties rely on the audit o...

AUDIT RISK As we have seen many parties rely on the audit opinion to make decisions, and therefore it is now a well established fact that if the auditor gives an audit opinion

Preliminary engagement, during the preliminary stage of an audit, an audito...

during the preliminary stage of an audit, an auditor most likely would not do the following

Online real time systems, List the internal controls that should be in effe...

List the internal controls that should be in effect solely because a EDP system is employed, classifing them as (1) Those controls pertaining to input of information and (2) All ot

Post balance sheet events, Post Balance Sheet Events Post balance shee...

Post Balance Sheet Events Post balance sheet events occupy a very significant place in auditing and hence there is generally a program of work which is carried out in this are

Assignment, i have assignment question

i have assignment question

Bank - cash and bank balances, Bank - Cash and Bank Balances The major...

Bank - Cash and Bank Balances The major concern in this area is to establish the existence of the balances and more currently due to failures in some financial institutions in

Share capital - audit process, Share Capital - Audit Process Share cap...

Share Capital - Audit Process Share capital is a special type of liability and when it has been issued during the year then verification procedures are as follows: 1. Confirm

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