Auditing and Assurance | Assignment 2

Running Head: AUDITING AND ASSURANCE
Auditing and Assurance
Name of the Student:
Name of the University:
Author Note:

1
AUDITING AND ASSURANCE
Table of Contents
Answer to question 1...........................................................................................................3
Answer to question 2...........................................................................................................3
Answer to question 3...........................................................................................................4
Answer to question 4...........................................................................................................5
Answer to question 5...........................................................................................................6
Reference list.......................................................................................................................7

2
AUDITING AND ASSURANCE
Answer to question 1
Analytical procedure is a type of audit evidence which is used during an audit procedure.
It consist of different procedures for the comparison of financial and operational information
while examining the historical data. This procedure is applied to check the possible problem in
the financial records which helps in further investigation. Analytical procedure is performed in
three different parts of audit which consist of the risk assessment procedures, substantive
analytical procedure and the final analytical procedures (Ferreira et al., 2017). Risk assessment
procedure is used to help the auditor in performing the audit work while understanding the
business and the plan. It is known as the foundation of audit as it help to understand the company
plan and procedures to provide reliable information to the user of the financial statement.
Analytical procedure is used during risk assessment process because it help to perform
the required procedures and steps in order to obtain the understanding of the business and its
environment including its internal control. It also helps to identify the risk of material, financial
misstatement and any fraud or error. This procedure is applied before the completion of the fiscal
year while enquiring with the management, employees, operation in control and inspection of the
documents.
Answer to question 2
The regulatory bodies like Auditing and Assurance Standard Board (IAASB) and the UK
Financial Reporting Council (FRC) issues rules and regulation which consist of professional
skepticism required for auditing. The main objective of the professional skepticism in an audit of
financial statement is to explain the importance of the auditors mind set and approach toward an
audit (Van Wychen and Laurens 2016). IAASB or FRC explains the professional skepticism