Introduction Substantive audit procedures are fundamental to the audit process, providing essential evidence to assess whether financial statements are free from material misstatement. These procedures … Read more
In auditing, substantive procedures and tests of controls are two distinct types of procedures used to gather evidence and assess the reliability of financial statements. … Read more
External audit refers to a review of financial statement by an independent auditor. In other words, it’s an inspection/examination of the numbers & facts stated … Read more
An investigation, inquiry, or validation of accounting standards may all be carried out in the form of an audit. An auditor may be asked to … Read more
The audit report is prepared and issued by auditors at the end of audit fieldwork. It’s directed to shareholders of the company where auditors give … Read more
Test of details refers to tests/procedures performed by auditor to obtain sufficient and appropriate audit evidence on different items of financial statement. These items include … Read more
Threats to auditor independence must be reviewed before engaging any audit activity. In simple words, an audit must be conducted independently of the client’s management. … Read more
Representation letter is used by auditor to get confirmation from audit client that they have been fair in providing all the relevant information/explanation to the … Read more
Disclaimer of opinion meaning Disclaimer of opinion means that auditors were not able to make any opinion on the financial statement of the business. So, … Read more
Following are the facts for statuatory audit vs.internal audit. Statutory audit Internal audit It is required by law. The provisions of the company ordinance require … Read more
An audit is a process of checking accounting and other information given in the financial statement. For instance, the closing balance of property, plant and … Read more
Broadly, there are three qualities of a good auditor, these include knowledge on financial principles & audit processes, certain personality characteristics, and experience in the … Read more
The scope of an audit means extent of work the auditor needs to perform. If the scope of an audit is extensive, the auditor needs … Read more
There are three types of audit risk. These types of audit risk include inherent risk, control risk, and detection risk. 1-Inherent risk The nature of … Read more
Definition Audit risk is the risk that auditors might issue a clean audit report when financial statement are materially misstated. The material misstatement in the … Read more
Vouching and tracing play a number of similar roles in auditing, but the key difference is the use of these auditing procedures to collect audit … Read more
External auditing is important to assess the fairness of financial statements prepared by the management. As we understand, there is an agency relationship between shareholders … Read more
The cut off concept in accounting aims to ensure events and transactions are posted in the correct accounting period. It helps to calculate profit/loss without … Read more
Definition The audit program is a detailed action plan for the audit team. It sets a direction for an audit team to perform audit procedures. … Read more
Auditors collect audit evidence during fieldwork. If audit evidence is sufficient and appropriate, they issue a clean audit report. Sufficiency of audit evidence refers to … Read more