Audit is an independent examination of business financial statements so as to issue opinion on whether the financial statement are prepared in accordance with acceptable financial reporting framework and show true performance and position of the business. Audit is conducted according to the requirements of countries laws and regulations and international standard on auditing. The auditor when conducting audit aim … Read the rest
Audit framework and regulation
Expectation gap is the gap between what public believe that auditors do and what actually auditors do or ought to do. Expectation gap occurs when the audits fail to meet the expectations of users of audited financial statements.
The audit is an independent examination of information to provide assurance on the information or examined the subject matter.
There are 3 types of audits.
Historical financial statements audit. This audit involves an independent examination of the entity’s financial statement in order to issue an opinion on its truth and fairness.
Compliance audit. This type … Read the rest
Professional skepticism is a state of mind where auditor question and collect sufficient and appropriate audit evidence before accepting client management assertion or explanation. Professional skepticism help auditor reduce audit risk and hence issue an opinion which will increase the credibility of financial statements.
The following are characteristics of professional skepticism
- Questioning of management explanation:
Dibal Associate, an audit and assurance firm, has been engaged as auditors for the M & B Bank Ltd, a public limited liability Company for some time now. M & B Bank has sixty branches throughout the country including branches in Dodoma, Mwanza, Tanga and Zanzibar. The Bank is one of the banks in the country which can boast of … Read the rest
The objective of a reasonable assurance engagement is a reduction in assurance engagement risk to an acceptably low level in the circumstances of the engagement as the basis for a positive form of expression of the practitioner’s conclusion.
In a reasonable assurance engagement, the practitioner:
- Gathers sufficient appropriate evidence,
- Concludes that the subject matter
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 top-down approach to conduct audit assignment.