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The Accounting System
ISA 400 Risk Assessment and Internal Control accounting system are the sequence of tasks and records of an entity by which transactions are procedure as a means of sustaining financial records. These systems specify, assemble, analyze, compute, categorize, record, sum up and report transactions and other events.
ISA 400 Risk Assessments and Internal Controls define that the auditor must acquire an understanding of the accounting and internal control systems enough to plan the audit and build up an effective audit approach. The auditor must use professional judgment to assess audit risk and to design audit processes to make sure it is decreased to an adequately low level.
The Companies Act Cap 486: places a duty upon the auditor in organizing his report to take out investigations which will allow him form an opinion on the financial statements in accordance with the seventh schedule to the Companies Act Cap 486
The purpose of the accounting system is to make sure that all transactions are entirely and precisely processed and recorded and that the resultant accounting entries are valid.
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