Overview: Audit objectives vary based on the types of audit engagement and the audit scope. The internal audit might have a different objective from an external audit or statutory audit. For example, the objective of an audit on financial statements basically is to assess the financial statements prepared by the audit’s client are true and […]
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Overview: Audit approaches are the methods or techniques that auditors use in their audit assignments. Both internal and external audits apply audit approaches to conduct their audit activities differently based on the nature of engagement, scope, nature of the client’s business, and audit risks. Selecting the right audit approach is important. It can help the
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Definition: Audit procedures are the processes, techniques, and methods that auditors perform to obtain audit evidence, enabling them to conclude the set audit objective and express their opinion. Sometimes we call audit procedures audit programs. These two terms are referring to the same thing. Auditors normally prepare audit procedures at the planning stages once they
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Definition: True and Fair is the term used in the audit report of financial statements to express the condition that financial statements are truly prepared and fairly presented in accordance with the prescribed accounting standards. For example, audit unqualified opinion of the financial statements stated that the audited financial statements are true and fair view
Overview: Audit strategy generally means the combination of audit approach to be used, resources management and allocation, timing of the audit, and the way how the audit engagement is managed. For example, the auditor will use risks based audit approach or a top-down approach to conduct audit assignments. Another example, auditors just engage with the
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Definition: Audit planning is a major part of audit work for both internal and external audits. Good audit planning will help the auditor to minimize its risks, improve audit efficiency, and meet its objective at the minimum effort. Auditors are required to prepare a proper audit plan to ensure that all audit risks are identified
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Overview: Audit Reports on the financial statements can be used for many different purposes, and for many different requirements. For example, it is required by the board of directors, shareholders, the entity’s board of management, as well as general tax department. These entities use the audit report to assess the quality of information that is
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Definition: Audit risk is the risk that auditors issue an incorrect audit opinion to the audited financial statements. For example, auditors issued an unqualified opinion to the audited financial statements even though the financial statements are materially misstated. In other words, the material misstatements of financial statements fail to identify or detect by auditors. Or
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Definition: Activities Based Management is used to describe the cost management applications of Activities Based Costing. Activities Based Management views the business as linked activities that ultimately add value to the customers. It focuses on managing the business based on the organization’s activities and assumes that such activities consume costs. Therefore by managing activities, costs
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Definition: Boston Consulting Group develops a matrix that could help the management of the company to assess the position of the strategic business unit and develop the right strategy to maintain and improve business units or products. In a large business corporation, there are many types of products, division and business units that diversify differently.
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