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HI6026 - Audit, Assurance and Compliance

   

Added on  2020-03-01

9 Pages2190 Words47 Views
By student name ProfessorUniversityDate: 22 August 2017.

1ContentsQuestion no 1..............................................................................2Question no 2..............................................................................5Question no 3..............................................................................6Refrences....................................................................................81 | P a g e

2Question no 1Audit of any entity has become an integral part of the compliance procedures since theintroduction of IFRS and other regulatory reforms even for the small and medium sized businesses.Audit is done with the motive of giving reasonable assurance to its stakeholders (users of financialstatements) like the shareholders, creditors, debtors, customers, banks, loan institutions, government,etc. a reasonable assurances to the accounts have been prepared on a fair basis and that it resemblesthe true state of affairs of the company. Audit is an independent examination of the books of accountsprepared by the management with the view to comment upon its viability and reporting. There may benumerous assumptions and estimates, which may be put up by the management in the course ofbookkeeping, which needs to be checked by the auditor and commented upon[ CITATION Rai16 \l1033 ]. The audit is not restricted to only large or small, profit or non-profit organisation but it may berequired for any entity depending upon the regulations. There are various procedures being followed bythe auditor to express an opinion, which may include substantive and compliance audit procedures.Substantive audit procedures are concerned with checking the supporting evidences on the basis ofwhich the recording has been done in the books like invoice copies, bills, signatures, date, registrationno, proper disposal of the tax at the right time, vouching of related expenditures and the sales made tothe customers. Besides this, it also includes verification of the liabilities and assets reported in thestatement of affairs on the reporting date. It is done with the view to check whether false recording ofincomes or expenses has not been done, similarly only those assets and liabilities have been reportedwhich actually exist materially[ CITATION Kne16 \l 1033 ]. In case the auditor does not gets sufficient confidence to comment upon the financials and findsa risk of material misstatement in the books, he may take help of the analytical audit procedures. Itincludes checking of the significant ratios, comparison of the company accounts with the budgetedfigures and forecasted figures, industry trend analysis and zero based budgeting analysis etc. All thisprocedures assist the auditors in developing the problem statement and forming an audit plan to betaken forward in further audit. This helps them to determine the areas which they need to focus more,the timing, which needs to be allocated, and the extent to which the same needs to be examined. Thesekey result areas have a significant bearing on the results of the organisation[ CITATION Son17 \l 1033 ].Internal financial control ascertains whether the auditor needs to focus more on the internal processesand procedure or not. In case the it is strongly built in the organisation, less would be the risk and less2 | P a g e

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