Rh Bill
Chapter 1:
Auditing, Assurance, and Internal Control
Auditing
Auditing is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and establishing criteria and communicating the results to interested users.
Internal Audits * Internal auditing: independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization * Financial Audits * Operational Audits * Compliance Audits * Fraud Audits * IT Audits * CIA * IIA
External Audits * External auditing: Objective is that in all material respects, financial statements are a fair representation of organization’s transactions and account balances. * SEC’s role * Sarbanes-Oxley Act * FASB - PCAOB * CPA * AICPA
Financial Audits * An independent attestation performed by an expert (i.e., an auditor, a CPA) who expresses an opinion regarding the presentation of financial statements * Key concept: Independence * {Should be} Similar to a trial by judge * Culmination of systematic process involving: * Familiarization with the organization’s business * Evaluating and testing internal controls * Assessing the reliability of financial data * Product is formal written report that expresses an opinion about the reliability of the assertions in financial statements; in conformity with GAAP
Attest Services * Requirements of attestation services * Written assertions and practitioner’s written report * Formal establishment of measurement criteria * Limited to examination, review, and application of agreed-upon procedures
Advisory Services * Advisory services * Professional services offered by public accounting firms to improve their client organizations’ operational
Auditing, Assurance, and Internal Control
Auditing
Auditing is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and establishing criteria and communicating the results to interested users.
Internal Audits * Internal auditing: independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization * Financial Audits * Operational Audits * Compliance Audits * Fraud Audits * IT Audits * CIA * IIA
External Audits * External auditing: Objective is that in all material respects, financial statements are a fair representation of organization’s transactions and account balances. * SEC’s role * Sarbanes-Oxley Act * FASB - PCAOB * CPA * AICPA
Financial Audits * An independent attestation performed by an expert (i.e., an auditor, a CPA) who expresses an opinion regarding the presentation of financial statements * Key concept: Independence * {Should be} Similar to a trial by judge * Culmination of systematic process involving: * Familiarization with the organization’s business * Evaluating and testing internal controls * Assessing the reliability of financial data * Product is formal written report that expresses an opinion about the reliability of the assertions in financial statements; in conformity with GAAP
Attest Services * Requirements of attestation services * Written assertions and practitioner’s written report * Formal establishment of measurement criteria * Limited to examination, review, and application of agreed-upon procedures
Advisory Services * Advisory services * Professional services offered by public accounting firms to improve their client organizations’ operational