S01-Introduction - AUDITING SECTION 1 Introduction...

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AUDITING SECTION 1 Introduction
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Definition of Auditing Auditing is a form of attestation Attestation refers to a specialist communicating Auditing is also a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic events to ascertain
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AUDITOR Obtains and evaluates evidence To ascertain correspondence between Assertions about economic data And established criteria Communicate results USERS
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Assertions are the representations of management as to the fairness of What are the established criteria? To evaluate fairness the auditor must gather evidence. What is the evidence? Evidence must be gathered objectively
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Auditing is a systematic process Evidence must be sufficient and competent Auditor does not guarantee accuracy Planning System Testing Substantive Testing Audit Report Test Internal Controls Test T/A’s and Balances
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To be competent, evidence must be both valid and relevant The process of communicating the results is referred to as attestation What is the mechanism?
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Generally Accepted Auditing Standards GAAS must be observed by the auditor The General Standard i. The examination should be performed and the report prepared by a person or persons having The Examination Standards i. The work should be adequately planned and properly executed using sufficient knowledge of the entity’s business as a basis. If assistants are employed, they should be properly supervised. ii. A sufficient understanding of internal should be obtained to plan the audit. When control risk is assessed below maximum,
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iii. Sufficient appropriate audit evidence should be obtained, by such means as The Reporting Standards i. The report should identify the financial statements and distinguish between the responsibilities of management and the responsibilities of the auditor. ii. The report should describe the scope of the auditor’s examination. iii. The report should contain either an expression of opinion on the financial statements or an assertion that an opinion cannot be expressed.
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iii. Where an opinion is expressed, it should indicate whether the financial statements present fairly, in all material respects, the financial position, results of operations and cash flows in accordance with an appropriate disclosed basis of accounting, The report should provide adequate explanation with respect to any reservation contained in such opinion.
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External vs. Internal Auditing External – conducted by auditors independent of management and representing third party users. Internal – serves management as opposed to third party users.
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Internal auditors are also engaged in evaluating the efficiency of operations Level to which the internal auditor reports is important The rule of thumb as to whom the internal auditor reports
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Governmental Auditing Federal and Provincial Auditor Generals Canada Customs and Revenue Agency Government accounting and comprehensive auditing
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S01-Introduction - AUDITING SECTION 1 Introduction...

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