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First of all, it depends upon how well the audit program is written. A well written audit program will include three areas of an organizations records: 1. money in and out, 2. procedures for handling the receipt of money and authorizations for the spending of money, and 3. the hierarchy of responsibility for both items 1 and 2, that is to say how each level of management uses it's authority regarding financial matters and procedural matters. And finally, it depends upon the size of an organization as to how areas of responsibility are distributed.
After an audit confirms that the procedures in place are adequate for the control of money in and money out and that those procedures are followed, the audit will dictate that the money received is properly handled, banked, accounted for and that the proper reconciliations have been performed between the receipt controls, the bank and the financial statements. On the money out side the dictate would be that the disbursement is legitimate, properly authorized and accounted for.
For a very small organization an audit of 100 percent of transaction may be examined, but for a large organization the transactions will be tested, that is to say only a given number of transactions will be followed or tracked through the whole process of money in and money out.
In the final analysis, it also depends upon whether or not an organization has an established internal audit program where a responsible department does regular audits on a timely basis, and that any outside audit firm can rely upon the adequacy and reliability of internal audits. If internal audits are performed the outside or third party auditor will have to start from scrach.
What else can I help you with?
Matters in current issues in auditing-?
The current issues in auditing that need to be addressed is matters that are unethical and fraud.
What is the difference between auditing and fraud examination?
An error represents an unintentional misstatement of the financial statement. it may be material or immaterial. fraud represents an intentional misstatement of the financial statement which can be material or immaterial.
What are internal controls used for?
Internal control is an accounting or auditing term. It plays a very large role in preventing and detecting fraud for companies, as well as directing and monitoring company resources.
Matters in current issues in auditing?
The matters in current issues are fraud and unethical business practices.
What is the importance of auditing to an entity?
auditing helps to detact error and fraud at an early stage It also helps management to improve or comeup with better strategies to quality management system .
What Types of audit checks in auditing a companys financial accounts?
In auditing a company's financial accounts, common types of audit checks include substantive tests, which assess the accuracy of financial data, and compliance tests, which evaluate adherence to relevant laws and regulations. Analytical procedures are also utilized to identify unusual trends or discrepancies in financial statements. Additionally, internal control assessments are performed to evaluate the effectiveness of processes designed to prevent errors and fraud. Together, these checks help ensure the reliability and integrity of the financial reporting.
What has the author Martin T Biegelman written?
Martin T. Biegelman has written: 'Building a World-Class Compliance Program' -- subject(s): Internal Auditing, Compliance auditing, Business ethics, Corrupt practices, Prevention, Corporations 'Foreign corrupt practices act compliance guidebook' -- subject(s): Prevention, Corrupt practices, Bribery, Fraud, International trade, Compliance auditing, Corporations 'Executive roadmap to fraud prevention and internal control' -- subject(s): Corporations, BUSINESS & ECONOMICS / Accounting / Managerial, Accounting, Corrupt practices, Accounting fraud 'Identity theft handbook' -- subject(s): Identity theft, Prevention, OverDrive, Business, Nonfiction
What are some of the responsibilities of the audit committee?
External auditing process Internal auditing process Internal controls Conflicts of interest (code of corporate conduct, fraud presentation) Financial reporting process Regulatory and legal matters
Can a properly designed and executed audit may not detect material fraud?
Not necessarity there are many techniques in auditing and any fraud cannot go unidentified or unnoticed if its audited by a certified auditor as they will have to undergo a training and work under a Qualified Auditor for a few years. They will learn both, how to do a fraud and how to detect them too. A material fraud can be identified very easily.
What are the advantage and disadvantage of internal control in auditing?
The advantages of internal control in auditing include enhanced accuracy and reliability of financial reporting, prevention of fraud, and improved operational efficiency through established processes. However, disadvantages may include the potential for high costs associated with implementing and maintaining these controls, as well as the risk of over-reliance on them, which could lead to complacency among auditors and management. Additionally, ineffective internal controls can create a false sense of security if not regularly monitored and updated.
Accountancy is necessary while auditing is a luxury comment?
I think what you're saying is that accounting is necessary to keep the company's books and records straight ... but auditing is a luxury as it is just validation of the accounting (as well as some other checks around fraud, internal controls, etc.)
Why is auditing considered useful for all types of business?
Audit can perform many types of functions in business. In general, they are the eyes and ears of the owner(s). Historically, they have been the primary internal control function of a business, but they have also been used to uncover fraud and discover potential process improverments.
