Definition of Auditing - 5714 Words

DEFINITION OF AUDITING Auditing is described as the independent examination of and expression of an opinion on the financial statements of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligation. Thus auditing of information systems can be defined as independent examination of and expression of an opinion on the development, documentation and controls of information systems of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant company requirement. The purpose of an audit is not to provide additional information but rather it is intended to provide the users of the systems with assurance that the information†¦show more content†¦The auditor seeks to obtain some background information of the nature of the client’s business. * Planning the audit; the auditor prepares a planning memorandum that shows the general strategy in to be followed in conducting the audit. * Ascertaining and evaluating clients accounting systems and internal controls, use of flow charts and evaluating using key questions. * Carrying out tests of controls: This enables the auditor to determine the level of reliance to be placed on the internal control system and therefore reduce the level of substantive testing. * Planning the level of substantive testing and formulating the substantive tests to be carried out. * Carrying out substantive testing on the selecting account balances. * Carrying out the final analytical review and concluding whether the financial statements show a true and fair view. * Drafting the audit opinion and any other reports to be issued under the terms of engagement e.g. the management letter. RIGHTS OF AUDITORS 1. Rights of access at all time to accounting records of the company. This includes; a. Rights of access to statutory books of accounts e.g. shareholders register, memorandum of association and minutes of important meetings. b. Access to returns from branches and vouchers of the company. 2. To require from officers and employees ofShow MoreRelatedThe Importance Of Auditing And The Advantage And Disadvantages Of Auditing1578 Words   |  7 PagesIntroduction This report explains what auditing means the purpose of auditing and the advantage and the disadvantages of auditing. Also explains what Expectation Gap means and how different people have different views on it, looking at what auditors consider their responsibilities are and what are the expectations. Also looking at the history of the expectation gap and the different definitions people came up with over the years. The Definition of Audit Auditor is an independent qualified accountantsRead MoreEssay on Internal Auditing and What It Entalis1137 Words   |  5 PagesTo answer this question we will have to first understand what is internal auditing and what does it entail and then answer why internal auditing is â€Å"eyes and ears† of management. Internal Auditing as defined in the IPPF Framework is â€Å"an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness ofRead MoreAudit Expectations Gap1349 Words   |  6 Pagestremendous amounts could be done in order to close the gap down. In this essay I will discuss some of these issues and in particular the strategies to reduce the gap. Definitions Various definitions have been proposed for the audit expectation gap. 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Table of contents †¢ Introduction (what is auditing) †¢ Auditing definitions †¢ Purpose of auditing †¢ An overview of framework for audit assignment †¢ Auditing terms and definitionsRead MoreDoes skepticism by the auditor would enhance audit quality1435 Words   |  6 PagesIntroduction The importance off skepticism in performing audits has been recognized from the time the very first auditing standard was implemented (Fullerton and Durtschi, 2012). The recent financial crises and audit failures have caused the profession to reassess and emphasise the importance of skepticism during an audit engagement, ensuring that auditors increase their level of skepticism (Fullerton and Durtschi, 2012). Auditors are now asked to expand their skeptical perspective to the levelRead MoreOperational Audit1064 Words   |  5 Pagesbusiness operations for the purpose of making recommendations about economic and efficient use of resource, effective achievement of business objectives and compliance with company policies. †¢ The term operational auditing is the most widely used today. †¢ Definition of terms o OPERATIONAL – implies a focus on operations, as opposed to financial position. o MANAGEMENT – implies that the information obtained in the audit process is useful to management decision making. Read More Aspects of Materiality: A Continuing Education Report Essay examples1477 Words   |  6 Pagesconcept to the field of auditing. Defining Materiality The utilization of the concept of materiality in auditing dates many years. Varying definitions of materiality during the preliminary stages of utilization prove that auditors recognized a need for this concept but did not have a standard for defining the term. The recognition by the Financial Accounting Standards Board (FASB) of the need for this concept prompted a decision to determine a universally recognized definition of materiality. InRead MoreAcct 3708 Lecture Pdf1701 Words   |  7 PagesUniversity of New South Wales School of Accounting Auditing and Assurance Services 2013 LECTURE 1 Introduction to the Audit Function Assurance Framework Australian Corporate Audits Auditing Standards Lecture Overview †¢ Announcements †¢ Overview course requirements †¢ Introduction to the course – Assurance – Auditing – Legal requirements – Auditing standards Announcements †¢ 1. Tutorial Allocation – Once classes are full no more will be admitted – No new classes will be scheduled