Auditing Principles and Procedures

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the primary purpose of an audit?

To express an opinion on the fairness of financial statements (correct)
To manage a company's financial operations
To prepare financial statements
To detect all fraud within a company

Which of the following is a fundamental principle in auditing?

Professional skepticism (correct)
Guaranteed accuracy
Auditor bias
Client advocacy

What type of audit is performed to assess a company's adherence to laws and regulations?

Tax audit
Compliance audit (correct)
Operational audit
Financial statement audit

Who is primarily responsible for the fair presentation of a company's financial statements?

Company management (C) Signup and view all the answers

Which of the following is an example of audit evidence?

Bank statements (D) Signup and view all the answers

What does materiality refer to in the context of auditing?

The significance of an omission or misstatement in financial statements (D) Signup and view all the answers

What is an internal control?

A process designed to provide reasonable assurance regarding the achievement of objectives (D) Signup and view all the answers

Which type of opinion is issued when the auditor believes the financial statements are presented fairly in all material respects?

Unmodified opinion (A) Signup and view all the answers

What is the purpose of an audit planning?

To develop an overall audit strategy and approach (A) Signup and view all the answers

Which of these options is a risk assessment procedure?

Inquiries of management (C) Signup and view all the answers

Flashcards

Auditing Definition

A systematic and independent examination of financial statements, records, operations and performance of an entity.

Primary Goal of an Audit

To express an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with an applicable financial reporting framework.

Auditor

A professional who conducts audits, either for an organization internally (internal auditor) or externally (external auditor).

Audit Risk

The possibility that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstated.

Signup and view all the flashcards

External Audit

An audit conducted by an independent external auditor to provide an opinion on the fairness of a company's financial statements.

Signup and view all the flashcards

Internal Audit

An assessment conducted by a company's internal staff, designed to evaluate and improve the effectiveness of risk management, control, and governance processes.

Signup and view all the flashcards

Auditing Standards

Standards that provide guidance for planning, conducting, and reporting on audits. In the US, these are generally referred to as Generally Accepted Auditing Standards (GAAS). Internationally, the IAASB issues International Standards on Auditing (ISAs).

Signup and view all the flashcards