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Review of Auditing and Assurance Principles

The document provides an overview of auditing and assurance principles. It discusses the agenda for a review session, including a Kahoot quiz on previous knowledge, an audit overview, and the audit process. The audit overview defines auditing and discusses types of audits and auditors. It also covers financial statement audits and their inherent limitations. The audit process section outlines the general audit approach using financial statement assertions and audit procedures, and provides an overview of the six steps in the audit process.

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Joseph Barrera
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519 views23 pages

Review of Auditing and Assurance Principles

The document provides an overview of auditing and assurance principles. It discusses the agenda for a review session, including a Kahoot quiz on previous knowledge, an audit overview, and the audit process. The audit overview defines auditing and discusses types of audits and auditors. It also covers financial statement audits and their inherent limitations. The audit process section outlines the general audit approach using financial statement assertions and audit procedures, and provides an overview of the six steps in the audit process.

Uploaded by

Joseph Barrera
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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REVIEW OF

AUDITING AND
ASSURANCE
PRINCIPLES
AGENDA:
1. Kahoot (Review of previous knowledge)
2. Audit Overview
3. The Audit Process
KAHOOT:
Objective: To test or review previous knowledge about auditing
assurance and principles.

Directions:
1. Download “Kahoot” application or simply search in the
internet.
2. Click “Enter game pin here”.
3. Enter pin code given by the facilitator.
AGENDA:
1. Kahoot (Review of previous knowledge)
2. Audit Overview
3. The Audit Process
AUDIT OVERVIEW:
1. Definition of auditing
2. Types of audits and auditors
3. Financial statement audit
DEFINITION OF AUDITING:
“An audit is a systematic process of objectively obtaining and
evaluating evidence regarding assertions about economic actions
and events to ascertain the degree of correspondence between
these assertions and established criteria and communicating the
results to interested users”. (American Accounting Association)
DEFINITION OF AUDITING:
AUDIT OVERVIEW:
1. Definition of auditing
2. Types of audits and auditors
3. Financial statement audit
TYPES OF AUDITS AND AUDITORS:

1. Financial statement (FS) audit (External auditors)


2. Compliance audit (Government auditors)
3. Operational audit (Internal auditors)
TYPES OF AUDITS:
FS AUDIT COMPLIANCE OPERATIONAL
AUDIT AUDIT

AUDITEE’S Financial statement fairly Organization has complied Organization’s activities


ASSERTIONS presented with laws and regulations. are conducted efficient
and effective.

ESTABLISHED Accounting standards Laws and regulations Objectives set by the


CRITERIA Board of directors

AUDITOR’S REPORT Opinion whether FS is Report on degree of Recommendations on how


fairly presented in compliance to laws and to improve operations.
conformity with regulations.
accounting standards.
AUDIT OVERVIEW:
1. Definition of auditing
2. Types of audits and auditors
3. Financial statement audit
FS AUDIT:
The objective of an audit of financial statement is to
enable the auditor to express an opinion (reasonable
assurance) whether the financial statements are
prepared, in all material aspects, in accordance with
the applicable financial reporting framework.
FS AUDIT – INHERENT LIMITATIONS

1. Nature of the procedures


2. Nature of financial reporting
3. Nature of evidence
AGENDA:
1. Kahoot (Review of previous knowledge)
2. Audit Overview
3. The Audit Process
THE AUDIT PROCESS:
1. General audit approach
2. Overview of the audit process
GENERAL AUDIT APPROACH:
GENERAL AUDIT APPROACH
 Financial statement assertions:
1. Completeness – All items that should be reported in the financial
statements are so included.
2. Existence and occurrence – Assets and liabilities exists as of the FS
date and that revenues and expenses occurred during the reporting
period.
3. Valuation and allocation – Assets and liabilities are properly valued
and that revenues and expenses are properly measured.
4. Obligations and rights – The entity has rights over the assets and
obligation to settle the liabilities.
5. Presentation and disclosure – Assets and liabilities are properly
classified and disclosures in the notes to FS are adequate.
GENERAL AUDIT APPROACH:
GENERAL AUDIT APPROACH
 Audit procedures:
1. Inspection – Examining records, documents or tangible assets.
2. Observation – Looking at a process or procedure being performed by
others.
3. Inquiry – Seeking information from knowledgeable persons inside or
outside the entity.
4. Confirmation – Consists of the response to an inquiry to corroborate
information contained in accounting records.
5. Computation – Checking arithmetical accuracy of source documents.
6. Analytical procedures – Analysis of significant ratios and trends,
investigation of fluctuations and relationships.
GENERAL AUDIT APPROACH:
GENERAL AUDIT APPROACH
 Audit evidence
Information obtained by the auditor in arriving at the conclusions on
which the audit opinion is based.

 Audit opinion
The results of audit procedures performed and audit evidence
gathered are carefully evaluated to arrive at the appropriate opinion
about the fair presentation of the financial statements.
THE AUDIT PROCESS:
1. General audit approach
2. Overview of the audit process
OVERVIEW OF THE AUDIT PROCESS
1. Accepting an Engagement
2. Audit Planning
3. Considering the Internal Control
4. Performing Substantive Tests
5. Completing Audit
6. Issuing a Report

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