Audit

Definition Going concern assumption is used by businesses to prepare the financial statement. This assumption impacts the accounting treatment, valuation, and presentation of various account … Read more

Auditors need to understand the overall business environment and controls implemented by the audit client. This enables them to assess the overall risk of material … Read more

Business understanding is important for auditors in the following way, Let’s understand the detailed aspects of the above. 1-Auditors will be able to assess risk … Read more

Definition Audit assertions are claims made by management that financial statements are accurate and do not contain any errors. Here, auditors’ work begins and they … Read more

Definition In an audit, know your client means an auditor needs to understand client business. The understanding needs to be obtained from different perspectives including … Read more

Definition Auditors perform audit procedures to obtain sufficient and appropriate audit evidence on the identified risks. Generally, auditors understand business, assess the risk of material … Read more

Definition Audit scoping refers to the process of setting extent, nature, and timing of audit procedures to be performed. The scope of auditing is dependent … Read more

The term Quality control review is widely used in the world of accounting and auditing. It aims to enhance the accuracy of implemented controls in … Read more

Definition Cut off testing refers to determining if accounting entries are recorded in the correct accounting periods. The purpose of this exercise is to determine … Read more

Definition The auditor performs analytical review procedures during audit execution. As the name suggests, it’s analytical. It means numbers are compared with other numbers by … Read more

An operational audit is conducted to evaluate the performance of a company’s operations. It includes both day-to-day activities and broader-scale activities. This type of audit … Read more

Definition The component auditor is the one who works on the financial information of the component. In simple words, the component auditor performs the audit … Read more

Definition A compliance audit is an assessment carried out, mostly by third party auditors, to examine the extent to which a company’s internal policies, procedures … Read more

Bank confirmation letter is used by the bank to confirm the nature and balance of the cash at bank. Generally, bank confirmation is used by … Read more

Test of control in audit is performed to evaluate internal controls implemented by the business/audit client. If the client has strong internal controls, the external … Read more

Definition Audit materiality means that any amount or information is material, if it has the ability to affect the decision of financial statement user. Types … Read more

Duties and responsibilities of an external auditor External auditors must be independent of the company to ensure an effective application of auditing techniques. They are … Read more