Statutory Audit: A statutory audit is the engagement of an audit of financial statements by independent auditors to the entity’s financial statements in compliance with the local law that the entity is operating. In most countries or territories, the audit of financial statements is required by law or status. And the entity that operated in […]
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Assurance engagement normally involves three parties and consists of five important elements. Those five elements include criteria, report, evidence, subject matter, and three-party relationship. Here is the detail: 1) Criteria: What are the criteria for the engagement? For example, if the engagement is the audit of financial statements, then the criteria would be the standards
What are the Five Elements of an Assurance Engagement? Read More »
Overview: The audit procedure is one of the most important things that auditors need to ensure that they are well and correctly prepared, tailored, and executed to minimize audit works and reduce audit risks. Sales revenues are one of the sensitive areas that auditors need to place their great attention on since it is the
Audit Procedures for Testing Sales Revenues (Risks and Assertions Included) Read More »
Overview: Depreciation expenses are one of the significant expenses that reporting in the company’s income statement. Those expenses are the costs that the entity charged to fixed assets used for operation during the periods through depreciation by using the systematic methods accepted by certain accounting standards. In the income statement, depreciation expenses are allocated in
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Account payable confirmation is the confirmation prepared and processed by auditors to cross-check the amount and information between the client’s records and the client’s supplier’s records. Those could be included in the outstanding balances and transactions. Account payable is the current liabilities recorded by the client in financial statements as of the reporting date. It
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Overview: Tailoring the correct audit procedures to the testing of fixed assets is not only helps auditors to minimize the detection risks but also helps the auditor to work more efficiently. That means the auditor could spend less time and effort on reviewing the fixed assets but still get the required result. The auditor could
Audit Procedures for Fixed Assets: Assertion, Risks and More Read More »
Overview: There are many audit procedures and approaches that auditors could use to perform during their detailed testing of the inventories report by management in the financial statements. Before going into detail on the procedure, it is good to start with the overview of inventories first. Inventories are the current assets that reporting in the
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Explaination: Bank confirmation is the auditor’s audit procedure to test the existence, accuracy, and ownership of the bank account and bank balance of the entity. This procedure is normally performed during the interim audit rather than at the completion stage. However, if there is no interim, then it is performed at the final fieldwork the
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Definition: A compliance audit is the type of audit service that their performance or procedure is mainly focusing on whether the entity complies with local law, regulation, and related rules. A compliance audit also reviews whether an entity complies with internal rules, regulations, policies, decisions, and procedures. An entity is required to comply with the
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Definition: Operational audit is the type of audit service that the review is mainly focused on the key processes, procedures, system, as well as internal control which the main objective is to improve productivity, as well as efficiency and effectiveness of the operation. The operational audit has also targeted the leak of key control and
Operational audit: Definition, Types, Processes, Purpose, and Reporting Read More »