Category: AUDIT

Computer Assisted Audit: Definition, Techniques, Tools, Advantages, Disadvantages

In recent times, auditing has experienced a profound transformation, harnessing the potential of technological advancements to enhance its methodologies and processes. Incorporating specialized computer software and innovative tools has become increasingly prevalent, enabling auditors to analyze extensive volumes of financial and operational data with unprecedented efficiency and accuracy. These fall …

Horizontal Audit: Definition, Checklist, Example, vs Vertical Audit

Most audit processes take a top-to-bottom approach. However, some companies may also conduct a horizontal audit, which differs in approach. On top of that, it also seeks to achieve a different objective than vertical audits. Companies use both types to identify potential improvements across departments and processes. Horizontal audits can …

Statutory Audit vs Non-Statutory Audit

Shareholders authorize auditors to examine a company’s financial statements under an audit engagement. In most cases, auditors seek to ensure the subject matter is free from material misstatements. On top of that, they also assess whether it adheres to standards or other regulatory frameworks. This process is crucial to ensure …

Types of Auditors

Conducting external audits is often mandatory for companies under the law or standards. However, companies may also perform these audits for other parts of their business or specific purposes. These entail obtaining the services of an auditor. Companies must understand the type of auditor they need to conduct audits. Before …

Audit Cycle: Definition, Steps, Example, Types

An audit involves the examination of a subject matter based on suitable criteria. In most cases, the subject matter is the financial statements prepared by a client. On the other hand, the suitable criteria may come from auditing standards or regulatory frameworks. Usually, each of these elements comes from auditing …

Peer Review Audit: Definition, Meaning, Importance, Requirements

Auditing involves examining a subject matter to ensure it meets some predefined criteria. Usually, it requires independent auditors who assess a client’s financial statements against accounting and other regulatory frameworks. Based on their work, auditors provide an audit report that includes their conclusion and opinion of the subject matter. While …

Auditing Inventories: Definition, How It Works, Importance, Example

One of the critical areas during audits is stock and inventory. For most clients, these constitute a significant portion of current assets. On top of that, they may include items with complex accounting adjustments. Some clients also hold inventory that requires specialized valuation. These issues complicate the auditing of inventory …

Audit Adjustment

Auditors examine a client’s records to ensure they meet specific criteria. Usually, it includes the financial statements backed by the general ledger. Sometimes, auditors disagree with some entries passed in the client’s records. In these cases, auditors may provide some adjustment entries to the client, known as audit adjustment. What …

Audit Evidence: Definition, Types, Examples, Procedure

The primary objective of audits is for the auditors to provide a report on a given subject matter. This report contains the auditor’s opinion of whether the subject matter includes material misstatements. Depending on the type of audit engagement, it may also provide other conclusions. Auditors base their opinion on …

Auditor’s Liabilities

Auditors collect sufficient appropriate audit evidence to provide their opinion on a subject matter. Based on this opinion, users can make various decisions. Therefore, auditors must consider the trust users put in their work. If auditors fail to perform their tasks effectively, they may face legal repercussions. These fall under …