AUDITING AND ASSURANCE CONCEPTS APPLICATIONS (PART 1)

 DESCRIBE WHAT AN AUDIT IS

An Audit is 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 thereof. (American accounting associations).

An audit is a systematic and independent examination of books, accounts,

documents, and vouchers of an organization to determine the accuracy and
reliability of the financial statements and non-financial disclosures. It involves
assessing whether the information presented provides a true and fair view of the
organization's financial position and performance. Auditors conduct audits to
provide assurance to stakeholders that the organization is operating effectively,
efficiently, and in compliance with relevant laws and regulations.
The unique aspect of an audit lies in its objective and unbiased nature. Auditors
are required to maintain independence and objectivity throughout the audit
process, ensuring that their findings are based on evidence and free from
personal bias. The audit process follows a set of standardized procedures to
ensure consistency and reliability in the results. Audits play a crucial role in
enhancing the credibility and transparency of financial information, providing
stakeholders with confidence in the organization's operations and financial
reporting.
In essence, an audit is a comprehensive examination that aims to verify the
accuracy and reliability of financial and operational information, providing
stakeholders with assurance on the organization's performance and compliance
with regulations. Its uniqueness stems from its objective approach,
independence, and systematic methodology in evaluating and reporting on the
organization's financial health.

 ENUMERATE AND DESCRIBE THE DIFFERENT PHASE OF AN AUDIT

1. Pre-engagement – This phase will require a decision from the auditor
whether or not to accept a new client or continue relationship with existing
one. This Process would require evaluation of the auditor’s qualification, but
also the integrity of management and auditability of the clients Financial
Statements.
2. Audit Planning – involves the development of an overall audit strategy, Audit
plan and audit program. The auditor will usually obtain more detailed
knowledge about the client’s business and industry in order to
understand the transactions and events affecting the financial
statements
3. Consideration of Internal Controls
 4. Evidence- Gathering (Substantive testing)
5. Completing the Audit
6. Issuance of the audit report
7. Post- Audit Responsibilities
 ENUMERATE AND EXPLAIN PRE-ENGAGEMENT ACTIVITIES
 IDENTIFY THE DIFFERENT CONSIDERATIONS IN ACCEPTING AND
CHANGING AND AUDIT.