Objectives, Control Risk, Inherent Risk, and Detection Risk in Auditing

Audit

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Objectives of Auditing:...............................................................................................................3
Review of control risk: ..............................................................................................................4
Review of inherent risk:..............................................................................................................6
Review of detection risk:............................................................................................................7
CONCLUSION...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Audit relates to a comprehensive analysis of the accounting records of company or any
other entity in attempt to determine or check and records on the facts relating towards its
financial operations and the performance thereto. It must be pursued 'to enhance the validity of
reported information where validity can be specified as the congruence among the information
delivered and reality represented (Demartini and Trucco, (2016).
Audit Oversight Board, formed pursuant to Sec 31C of Securities Commissions Act,1993 and
functional since year 2010, is primarily responsible for auditing supervision and for committed
to ensuring trust in quality and validity of audited-final accounts in Malaysia. The study consists
of comprehensive review of 3 significant components of risks in auditing based the analysis of
published journals.
MAIN BODY
Objectives of Auditing:
Audit term corresponds to a precise and realistic review of records, accounts or
statements, tasks and findings in accurate and fair perception or within the material
aspect of financial condition in compliance with global reporting requirements (Graham, Bedard
and Dutta, (2018). This is standardized procedure for the collection and unbiased evaluation of
audit evidences to decide the degree to which environmental management program audit
standards laid down by the corporation are met. The purpose of auditing of enterprise's financial
statements and accounts is to allow auditing professional to effectively express a
significant opinion on whether financial statements are framed, in material respects, under the
relevant financial reporting system. Following are several key objectives of Audit, as follows:
 Accounts/Statements Verification: The prime objective of audit is to determine the
integrity & authenticity of accounting records. This carefully reviews each financial
transaction. Through accounting records it recognizes and eliminates frauds. The
examiner is granted free hands while doing audit of accounting books & is independently
of industry.
 Evaluating Accounting Policies: Each organization or entity has to obey those accounting
policies. Due to such accounting policies accounting books are framed. If an organization
has an efficacious accounting structure it can significantly raise its effectiveness. The