Scribd
Upload
104 views1 page

Chapter 2 - Auditing Overview

Audit is a systematic process to evaluate evidence objectively and communicate results. There are three main types of audits: financial statement audits determine if financial statements are fairly presented; operational audits assess effectiveness and efficiency of operations; and compliance audits determine if rules and regulations are followed. Financial statement audits obtain reasonable assurance that financial statements are free from material misstatements due to fraud or error. Auditors assess audit risk, the risk of an inappropriate opinion if financial statements are materially misstated, using an audit risk model considering inherent risk, control risk, and detection risk. The overall objectives of a financial statement audit are to obtain reasonable assurance of fair presentation and communicate audit findings. Auditors evaluate assertions

Uploaded by

Jean Garcia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
104 views1 page

Chapter 2 - Auditing Overview

Audit is a systematic process to evaluate evidence objectively and communicate results. There are three main types of audits: financial statement audits determine if financial statements are fairly presented; operational audits assess effectiveness and efficiency of operations; and compliance audits determine if rules and regulations are followed. Financial statement audits obtain reasonable assurance that financial statements are free from material misstatements due to fraud or error. Auditors assess audit risk, the risk of an inappropriate opinion if financial statements are materially misstated, using an audit risk model considering inherent risk, control risk, and detection risk. The overall objectives of a financial statement audit are to obtain reasonable assurance of fair presentation and communicate audit findings. Auditors evaluate assertions

Uploaded by

Jean Garcia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

AUDITING OVERVIEW

Audit directly report to TCWG.


- systematic process - mainly perform operational and compliance audit
- obtaining and evaluating evidence objectively
- ascertain degree of correspondence between Governmental Audits
-determination whether government funds are being
assertions and established criteria
- communicate the results to the intended users handled properly in compliance with the applicable
regulation.
-encompasses both investigative and reporting process

Types of Audit Auditor’s Overall Objectives in FS Audit


a. To Obtain Reasonable assurance that Fs are free from
A. As to Subject Matter
1.Financial Statement Audit material misstatements, whether due to fraud or error
b. To report on FS and communicate the auditor’s
- to determine whether FS were fairly presented in
accordance with AFRF findings.

Audit Risk
Assertions
- representations by management that are embodied in - risk that the auditor gives and inappropriate audit
opinion when the FS are materially misstated (beta
the FS
risk).
Categories of Assertions - does not include alpha risk, the risk that an auditor
1. Transactions and Events – primarily income might express an opinion that FS are materially
statement accounts (3COA) misstated when they are not.
a. Cutoff -simply stated, it occurs when the FS are already
b. Completeness materially misstated even before the audit and the
c. Classification auditor fails to detect them leading to expression of an
d. Occurrence inappropriate opinion.
e. Accuracy
Audit Risk Model
2. Account Balances- balance sheet accounts (EROCVA)
a. Existence ROMM Detec
Audit Risk (Inherent Risk and
b. Rights and Obligations tion
c. Completeness Control risk ) Risk
d. Valuation and allocation
Risk of
3. Presentation and Disclosure- entire FS ( OROCCUAV) Material Misstatement – the chance that FS are
a. Occurrence and rights and obligations materially misstated before the audit begins
b. Completeness Detection Risk – the chance that the auditor fails to
c. Classification and Understandability detect material misstatements
d. Accuracy and Valuation
- DR and ROMM are inversely related
2.Operational Audits
- purposely conducted to determine the effectiveness
(measure whether entity’s achieve its goals) and
efficiency ( how well entity’s resources is being
managed) of operations
1. Economy and Efficiency – management audit
2. Effectiveness – Program result audit

3.Compliance Audits
- to determine whether the entity is following a certain
policies, rules and regulations set out by some higher
authority.

B. As to Subject Matter
1. External Auditors
- professional independent accountants in public
practice
-mainly perform FS Audit

2. Internal Auditors
- independent of the department they are auditing and

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy