Final audit testing is part of the audit test on the financial statements which normally perform at the year-end or at the time after the client produce its financial statements.
To let you get a better understanding of this, let me give you the big picture of the audit test. After this, you will be able to understand what is final audit testing and what is the interim audit testing.
Well, in most of the case, the scope of audit on the financial statements is twelve months. let say from 01 January 2016 to 31 December 2016. The auditor might choices, based on their audit strategy, to perform their audit in two sections.
One is interim and another final audit. And in the interim period, the financial statement to be reviewed could be six months or nine months. These audit strategy could help auditors works to be more efficiency.
Now let discuss detail about final and interim audit testing
Interim audit is normally performed to the part of the client financial statements. For example, six months or nice months periods. This work will help the auditor to reduce audit works at the year-end or at the final audit. Not all audit assignment requires an interim audit.
This is based on the audit strategy. however, most of the big client required an interim audit. This will make auditor get a better understanding. Sometime, client request auditors to perform interim audit because they require the interim report or they try to reduce their involvement with the auditor at the year-end.
And sometimes it is the requirement of local regulators that required the interim financial statements to be audited, especially the companies listed on the stock exchange.
Final Audit Test
Most of the audit works are performed at the final audit test. These might include a test of internal control and substantive test. Final audit test is normally done at the agreed time frame between auditor and client.
But most of the case, it has done at the year-end because of most of the audit report required to submit to related authority in the early of next months.
At this stage, the auditor will focus only the last six months or three months period that remaining from the interim audit. The audit procedures for both audits are not different.