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Because of the risk of material misstatement an audit of financial statements in accordance with generally accepted auditing standards should be planned and performed with an attitude of?
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The responsible, moral answer is 'yes', absolutely yes. However, you can read your governing documents to determine the frequency and the audit-level of financials due you …from your board of directors. Frequently, you are entitled to at least quarterly financial reports; annually you could also be entitled to audited financial statements. If no audited statements are available, you can request (in writing) an explanation from the board for the lack of an audit. It is possible that there were not enough association funds to pay for an audit, or that the board felt that an audit was not necessary. Your membership standing or status may preclude you from receiving financial statements, if, for example, you are behind in paying your assessments, you may be denied access to financials. Your governing documents will specify audit frequency and your access to financial statements.
In the US, there is no law requiring that quarterly financial statements be audited. Financial statement audits are extremely expensive and time-consuming, so there should be …some compelling reason for a company to have its financial statements audited. For the typical US company, the expense of having its financial statements audited is probably not worth any benefit it might receive as a result of the audit, and for US nonpublic companies, audits are not required by law. An outsider such as a bank might want to see audited financial statements from a prospective borrower, but even then, audits are so expensive that this would be relatively rare. The company might need another loan just to pay for the audit! However, publicly owned companies (companies that sell shares of stock to the general public), howver, are required by law to have an annual audit of their financial statements by an independent CPA. This is to help protect the public. However, not even publicly owned companies are required to have their quarterly financial statements audited. Only their annual financial statements must be audited. Although public companies must submit quarterly financial report information to the SEC, the first three quarters' financial statements need only be "reviewed" by an independent CPA. A review involves limited testing procedures that are much less in-depth and time-consuming (and expensive) than audit procedures, and this permits the company to submit its financial information to the SEC on a timely basis. However, the fourth quarter report submitted by a public company must include audited financial statements for the entire year.
An audit is considered a risk assessment, therefore these terms are interchangeable. And audit plan can have various meanings, some consider this to be an annual audit plan wh…ich includes all the audits that will occur within a companies calendar year. Others consider this to be the plan for undertaking a specific audit. Its all in how you define the words, audit plan, audit schedule, audit check list.
Auditing the financial statements of a business is a tedious process, the further the auditor wants to go back, the more difficult it becomes. In order to audit the fina…ncial statements of a company, the auditor has to go through all the financial statements, look at all receipts of moneys earned, spent, invested, etc and compare them to each and every entry to make sure that they match. Providing all accurate receipts, invoices, pay-roll information and other financial information will help make the process much easier and faster.
Distinguish between generally accepted auditing standard and generally accepted accounting principle?
general standards field work of standards reporting standards
Answer . If it is a publicly held entity they should post the financial statements on their website or provide a copy if you request one. (They are required to provide the…m.). If it is a privately held entity then you have to ask very politely and have a valid reason as to why you would need them. (They are NOT required to provide them.)
What are the financial statements assertions that went wrong in audit of the financial statements of the satyam company?
Financial statement assertions are classified into the following five: 1. Existence: The assertion on existence is made to check whether the specified assets and …liabilities are present at the given date. It is also required to check that the transactions that are recorded took place at the specified date. In order to test these items of the financial statement, it is not sufficient that only books are consulted which record the assets or the liabilities. There should be proof of the existence of the physical assets or liability. For checking existence help is also sought from outside. 2. Completeness: Checking completeness of a financial statement is to analyse whether all the transactions that are already given in the financial statement are rightfully included. In order to abide by the completeness assertion, the auditors prove with the help of sufficient evidence that all the recorded transactions deserve to be included. This is further supported with an external document so as to provide evidence regarding the occurrence of the transaction. 3. Valuation: Valuation basically checks whether the different components of the financial statement have been included in the right proportion. The components are assets, liabilities,expense and revenue. The auditor does this with the help of GAAP. 4. Rights and obligations: This is to check whether the assets that are included in the financial statement are the rights and the liabilities are the obligations of the company. In order to ensure this, sometimes special purpose entities are created. 5. Presentation and Disclosure: This assertion is to ensure whether the items in the financial statements are classified in the right way. It is important to check that the account balance is calculated as well as disclosed properly. Junaid Yousaf www.youngdesigners.tk
Audits are performed on financial statements in order to: Prevent fraudEliminate errors or mistakes from the bookkeeping process Auditors must also ensure the information …presented is: AccurateReliable and validMeets SEC requirementsAdheres to GAAPConforms to tax lawsPasses industry regulationsDiscloses any events relevant to shareholders
In the US, Generally Accepted Auditing Standards (US GAAS) are 10 principles developed by the American Society of Certified Public Accountants (AICPA). These standards provide… the criteria (ground rules) for conducting every audit in such a way that the CPA conducting the audit is able to properly express an opinion on a client's financial statements and give reasonable assurance to users of those statements about whether (or not) the statements fairly present the company's financial condition in all material respects. Among other things, GAAS requires that an auditor must: have adequate technical training and proficiency, exercise due professional care, and maintain independence, in order to properly perform any audit. There are additional US GAAS standards that apply to Fieldwork (the actual planning and performance of the audit) and Reporting (statements that the auditor must include in any report the auditor issues about the audited financial statements). A more detailed statement of US GAAS principles is readily available online. Think of GAAS as the "competence/thoroughness/quality" standards that apply to every financial statement audit. For publicly-owned companies, US GAAS also includes any auditing standards issued by the SEC. Audit procedures, however, are the individual steps, the nuts-and-bolts procedures and tests used to verify account balances and other management assertions during a given audit. These procedures are planned by the auditor and outlined in an audit program, which gives the audit team a "roadmap" to follow for this particular audit. Although GAAS requires very few specific audit procedures (or else documented justification by the CPA of why any required procedure was omitted, and of what procedure was done instead to make up for it), in general, GAAS doesn't concern itself with testing what is on a given client's financial statements. That is where auditing procedures (aka audit testing procedures) come into play. Auditing procedures are those tests and procedures used to test this client's actual account balances, and/or to gain knowledge of and test the design and effectiveness of this client's internal control. In any given audit engagement, it is generally up to the auditor's professional judgment to select the most appropriate auditing procedures in order to reasonable satisfy himself that the client's financial statements fairly present the client's true financial condition. The auditor must always follow GAAS, but he has a good deal of latitude in choosing which auditing procedures he will perform. One example of an auditing procedure is a confirmation requested from an outside party; this is used to see whether the client's records match those of an outside third party. For example, the auditor might send a confirmation form to the client's customers, asking them to verify the amounts the client says they owe. This tests the accuracy of the client's reported Accounts Receivable, and is also a way to test for possible fictitious sales reported by the client on its financial statements. A second (and very important) audit procedure is to observe the client's inventory count at the financial statement year-end date. This procedure is used to test for the existence of the inventory, and the reasonableness of the value at which the client has reported it. Some audit procedures are designed to determine those areas in which the client has a well-designed and effective internal control system over the recording of financial information in its accounting records (and therefore in its financial statements). Other audit procedures are designed to directly test the amounts on the financial statements (account balances). Still other procedures involve ratio analysis and other analytical procedures to identify unusual relationships between related account balances and reasonableness of estimated amounts. Some procedures can accomplish more than objective.
What are the differences and similarities in audits of financial statement compliance audits operational audits?
OPERATIONAL AUDIT. An operational audit is a systematic review and evaluation of an organizational unit to determine whether it is functioning effectively and efficiently, whe…ther it is accomplishing established objectives and goals, and whether it is using all of its resources appropriately. Resources in this context include funds, personnel, property, equipment, materials, information, space, and whatever else may be used by that unit. Operational audits can include evaluations of the work flow and http://www.answers.com/topic/propriety of performance measurements. These audits are tailored to fit the nature of the operations being reviewed. "Carefully done, operational auditing is a cost-effective way of getting a higher return from the audit function by making it helpful to operating management. COMPLIANCE AUDIT. A compliance audit determines whether the organizational unit or function is following particular rules or directives. Such rules or directives can originate internally or externally and can include one or more of the following: organizational policies; performance plans; established procedures; required authorizations; applicable external regulations; relevant http://www.answers.com/topic/contractual provisions; and federal, state, and local laws FINANCIAL AUDIT. A financial audit is an examination of the financial planning and reporting process, the conduct of financial operations, the reliability and integrity of financial records, and the preparation of financial statements. Such a review includes an appraisal of the system of internal controls related to financial function.
Shareholders, creditors and other stakeholders.
In most condominium associations, unit owners are also known as association members. You can find your answer in your governing documents, in the sections that address fina…ncial matters. You can request specific access to the audited financial statement through your property manager or your board of directors, specifically the treasurer. If you have a right, based on your governing documents, and the right is denied, you can demand access and engage an attorney, if necessary. Part of a treasurer's job is to share financial information with unit owners on a regular basis in most condominium associations.
So that the company will know how much it has made and how much it has in loss and to improve.
What is the difference between investigation audit and conventional audit in financial statement audit?
Purpose of investigation audit is to find out the evidance of the specific agenda for which investigative audit is conducted while conventional audit objective is to find …out that financial statements represents the true and nature of business or not.
In Business Law
Around 4 decades ago,auditing has generally been associated with only accounting and financial records & the objective of this audit is to enable the auditors to express an op…inion whether the financial statement are prepared , in all material respects, in according with an identified financial reporting standards & frameworks. It was around 1970,that some countries began to pay attention to Govt. shrinking policy and actually this policy was influenced by limitation of the resources and gain the most from the least. There are different kinds of audit from different aspects as - Regularity audit(compliance),Financial audit & Performance audit. Thus ,Auditing is not generally associated with only accounting and financial records.
The difference between assets and liablities are net assets. Per new reporting requirements it is necessary to further distinguish this value. The new reporting standards requ…ire that net assets be separated into 3 catagories. Invested in capital assets, net related debt, restricted and unrestricted. The section of invested in capital assets starts with your capital asset value less accumulated depreciation. The capital assets have to be further reduced by the debt held related to those assets. This could be bond issues or donations for capital assets. It is important to remember that other balance sheet items realted to your investment, unamortized prem or discount on the bonds and issuance costs shoud be included in the value. Accrude interest payable is exclude here because its a current liability, and thus will require current assets to retire. Any part of the debt not yet expensed to purchase capital assets should be moved to the second section, restricted for capital projects. Another element of the restricted area includes items retricted "legally" for payment. This would included accrude interest payable on the bonds outstanding. Per the standard if your debt exceeds capital assets acquire the value should be zero. Only positive amts, or zero will be shown in all sections accept for unrestricted. If the amt of restrictions on net assets exceeds net assets the value of unrestricted will be negative or deficit. Conversly, if net assets are greater than restrictions the unrestricted will be positive. When seen on the the balance sheet the deficit indicates legal restrictions in a long term sense. It does not speak to the ability of the company to meet current obligations.
Balance Sheet , Income Statement and Statement of Cash Flow.