Auditing Notes

In: Business and Management

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Course objectives understanding of the history, legal and professional framework within which an audit of financial information and systems takes place appreciation of the necessary audit techniques, judgement and practical skills as applied to both manual and computer-based systems awareness of current developments in the auditing profession, both in the UK and internationally

What is an audit?
“A systematic process of objectively gathering and evaluating evidence in order to ascertain whether assertions about economic actions and events made by individuals or organisations correspond with established criteria and communicating the results of the examination to users of the reports in which the assertions are made.” (American Accounting Association, Statement of Basic Auditing Concepts)
Auditing gathers and evaluates evidence with respect to the information created by directors and accountants. It is an evaluation process
Auditor reports on the fairness of the report on use of resources and discharge of duty by the directors after critically examining the assertions it contains against; available evidence and establishing criteria for presenting the report
Types of audit
External audits: primarily for the benefit of shareholders and market efficiency
Financial statement audits: examination of financial statements prepared by an entity’s directors for the benefit of shareholders and others
Compliance audits: to determine whether an individual or entity has acted in accordance with regulations
Internal audits: primarily for the benefit of management
Operational audits: evaluation of an entities operations for the purpose of improving the efficiency and/or effectiveness of the entity
Objectives of Financial Statement Audit
Responds to changes in socio-economic environment
Audit techniques change to meet changing objectives

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