Audit Report: Key Decisions, Evidence, and Factors for Auditors

This report delves into the critical aspects of quality audits, focusing on the decisions auditors make concerning the nature and reliability of evidence. It outlines four key decisions auditors undertake, including determining audit procedures, sample sizes, item selection, and the timing of procedures. The report then explores four crucial factors influencing the reliability of audit evidence: materiality, document inspection, inquiry, and internal control. It emphasizes the importance of high-quality audits in achieving company goals and ensuring the accuracy and fairness of financial statements. The report also references various research papers to support its arguments, providing a comprehensive overview of the audit process and the significance of evidence in forming reliable audit opinions.

Running Head: Audit
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Quality audit
9/20/2019

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Contents
Four decisions taken by the Auditor in considering the nature evidence........................................2
Four factors to be consider in which the evidence can be rely upon...............................................3
References........................................................................................................................................5

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The quality audit is the prices in the company which helps in examining the internal and the
external audit team and quality. High quality of the audit is essential in every company as it helps
in achieving the goals and the objectives of the company. To meet the quality standards and
conformance in the company it is important to do the internal and the external audit. The good
professional opinion of the auditor is delivered and whose decision should be supported by the
proper evidence and judgment and the opinion should be reliable, understandable and
independent. The quality auditor performs many riles in the company such as inspecting,
monitoring, recording, correcting the deviations and inspect the operations of the company in the
effective manner (Bowlin, et al., 2015).
Four decisions are taken by the Auditor in considering the nature evidence
There are several decisions which were taken by the auditor in the company. The major role of
eth auditor in the company is to evaluate whether the financial statement of the company is free
from any misstatement or not. The report prepared by the company should be fair and free from
any fraud and error (Cahan and Sun, 2015). So, the auditor takes the decisions regarding the
financial statements of the company and for that the sufficient audit evidence is whether the
financial statements of the company are appropriate or not. The auditor takes any decisions in the
company in regards to the financial statement of the company so sufficient audit reference is the
number of the audit references. The four major decisions taken by the auditor are stated below:
 The first decision which the auditor take is what audit procedure should they use so that
reliable decisions can be taken in the company.
 The second decision taken by the auditor is that while taking the audit procedure which
sample size should be selected (Francis, 2011).
 The third decision taken by the auditor is that which items should be selected and for
items are relevant from the population.
 The fourth audit evidence decision is that when the procedures of the audit should be
performed in the company.

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The amount of the evidence is important in the company so that any conclusion can be made by
the auditor in regards to the internal control and the financial statement of the company. There
are several pieces of evidence through which the Audit procedures can be taken such as through
the recalculation, observation, inspection, confirmation, analytical procedures, etc. Audit
procedures are used by the auditors so that they can evaluate whether the financial information of
the company is accurate or not and this procedure helps in taking the decision that the whether
the transactions recorded in the accounting records are correct or not (Myers, et al., 2014).
The audit evidence can be of several types such as documentation, observation, confirmations,
physical examination, etc. These types of audit evidence help in examining and inspecting
whether the information provided is free from any material misconduct. The person can rely
more on this evidences than the audit.
Four factors to be considered in which the evidence can be relied upon
Materiality: The financial statement provided by the company should be free from the material
misstatement. The statement made by the auditor should not be made under any influence,
coercion or under any pressure. The statement made by the auditor in regards to the financial
statement should be true and fair.
Inspection of the document: The evidence made by the auditor are reliable when the documents
presented by the company are properly inspected by the auditor. Sometimes the companies make
fraud and represent the false appears which creates many problems. So the documents provided
by the company should be properly accessed (Myers, et al., 2014).
Inquiry of the things: It is also an important factor as to inquiry the things deeply is very
necessary that the evidence provided is correct or not. The auditor has to inquiry every detail that
the documents presented by them should be free from any fraud and errors. They should deeply
review the documents and then only rely on certain things.
Internal control: The auditor should not access the financial statements of the company but they
should also analyze how much interval controls the company has. The auditor of the company
analysis the internal control as it helps in ensuring the accounting information and the financial

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information and prevents the company from fraud and accounting. It is the mechanism on the
company which in which the evidence can rely on (Tepalagul and Lin, 2015).
There is the five process of the audit process which are section phase, execution phase, planning
phase, reporting phase, follow up. The auditor reviews the company financial statement by a
proper accounting process which is also known as the audit cycle where the auditor reviews the
financial performance of the company. The auditor ensures that before releasing any financial
statements that the information provided them is accurate or valid. To carry out the specific
operations or the task in the company the inspector inspects the suitability. The inspections are
done in the company to analyses the vessels vessel are fit or not and objectives of the audit can
be achieved product line of the products as it help in taking the essential decisions.
Audit effectiveness and suitability is very essential in the company as the company will get the
desired results, the resources used in the company are being used nicely, it helps in minimizing
the cost and operating the functions (Khlif and Samaha, 2014). For improving the performance
of the company, the auditor gives the advice which is mandatory for the surveillance to the
manager and the board of the directors of the company so that they can improve the financial
performance of the company and run the business activities in the effective manner.

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References
Bowlin, K.O., Hobson, J.L. and Piercey, M.D., 2015. The effects of auditor rotation, professional
skepticism, and interactions with managers on audit quality. The Accounting Review, 90(4),
pp.1363-1393.
Cahan, S.F. and Sun, J., 2015. The effect of audit experience on audit fees and audit
quality. Journal of Accounting, Auditing & Finance, 30(1), pp.78-100.
Francis, J.R., 2011. A framework for understanding and researching audit quality. Auditing: A
journal of practice & theory, 30(2), pp.125-152.
Khlif, H. and Samaha, K., 2014. Internal Control Quality, E gyptian Standards on Auditing and
External Audit Delays: Evidence from the E gyptian Stock Exchange. International Journal of
Auditing, 18(2), pp.139-154.
Myers, L.A., Schmidt, J. and Wilkins, M., 2014. An investigation of recent changes in going
concern reporting decisions among Big N and non-Big N auditors. Review of Quantitative
Finance and Accounting, 43(1), pp.155-172.
Tepalagul, N. and Lin, L., 2015. Auditor independence and audit quality: A literature
review. Journal of Accounting, Auditing & Finance, 30(1), pp.101-121.