Advanced Auditing 1Introduction, auditing standards and IFRS, their relevance, Framework of Philippine Standards on Auditing Module 001 Introduction, auditing standards and IFRS,their relevance, Framework of Philippine Standards on AuditingAt the end of this module, you will be able to: 1.To learn the origin of Auditing 2.To discuss the Auditing 3.To be able identify other audit related activities 4.To be able to familiarize with the Auditing standards 5.To learn different types of Audit 6.To be able to learn the Frameworks of Philippine standards of Auditing Origin of AuditFrom the time of ancient Egyptians, Greeks and Romans, the practice of auditing the accounts of public institutions existed. Checking clerks were appointed in those days to check the public accounts. To locate frauds as well as to find out whether the receipts and payments are properly recorded by the person responsible was the main objective of auditing of those days. During the 18th century industrial revolution brought in large scale production, steam power, improved facilities and better means of communication. This resulted in the origin ofjoint stock form of organizations. Shareholders contribute capital of these companies but donot have control over the day-to-day working of the organization. The shareholders who have invested their money would naturally be interested in knowing the financial position of the company. This originated the need of an independent person who would check the accounts and report the shareholders on the accuracy of the accounts and the safety of theirinvestment. The word ‘Audit’ is originated from the Latin wordey are accurate and inhich means ‘to hear’. In the earlier days, whenever there is suspected fraud in a business organization, the owner of the business would appoint a person to check the accounts and hear the explanations given by the person responsible for keeping the account and funds. In those days, the audit is done to find out whether the payments and receipt are properly accounted or not. The objective of modern day accounting is not only for the verification of cash but to report the financial position of the undertaking as disclosed by its Balance sheet and Profit and Loss Account. Course Module
Advanced Auditing 2Introduction, auditing standards and IFRS, their relevance, Framework of Philippine Standards on Auditing Defining AuditISA 200 states that the purpose of an audit (a form of assurance engagement) is to enhance the degree of confidence of intended users in the financial statements. This is achieved by the auditor expressing an opinion on whether the financial statements of an entity are prepared, in all material respects, in accordance with an applicable financial reporting framework. A financial reporting framework may be provided, for example, by countryspecific legislation plus international financial reporting standards.