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Auditing Procedures
Auditing is a process to check, verify the financial statement of a company for the benefit of shareholder and for tax department. Auditor does all the process like the accounting process. Accounting is the measuring stick business owners use to gauge their company performance. Business owners use accounting to record, report and analyze various pieces of financial or business information. Several common procedures exist in the accounting system. Smaller or home-based businesses may not use each procedure since they often have less financial information. Larger business organizations usually have several employees to handle the accounting function. Auditors do the following procedure & check all transaction & entries,
Identify Transactions:
Accounting record help the auditor to identify transactions. Each business transaction produces information relating to goods or services sold during business operations. Business owners must properly identify each transaction so they can handle it according & auditing to proper accounting principles.
Analyze Transactions:
Analyzing transactions allows auditor to decide how the financial transaction is recorded. Amount, financial accounts and transaction date are a few pieces of information to analyze before recording the transaction.
Journal Entries:
Journal entries are the most common way business owner record financial transactions into their accounting books. Business owners often use journal entries to record information into one or several accounting ledgers or journals. Small businesses using accounting software can often program automatic journal entries to save the business owner time during the accounting procedure. Auditor verifies these entries with the transaction.
General Ledger:
The general ledger includes the hold of the small business accounting information. Accounts Payable or receivable, as well as journals, financial accounts and other information can be included in the company general ledger. Companies often use the general ledger to create financial statements for their business operations.
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Trial Balance:
The trial balance is the first step in reviewing and closing the company accounting period. The trial balance lists the total from each account in the company general ledger. Auditor can review this information to ensure it is accurate and valid.
Adjusting/Closing Entries:
Adjusting entries usually occur during the company accounting period closing process. In this stage the accountant can change the amounts. Adjusting entries may also be required if the business owner must estimate certain expenses because a bill has not been recorded for the accounting period. Business owners can post the wrong closing entries, which represent the final information for the accounting period.
Adjusted Trial Balance:
An adjusted trial balance is run once all adjusting entries for the accounting period are posted into the company general ledger. Auditor review the adjusted trial balance before creating financial statements because the trial balance can be easier to read and make adjustments if there is any mistake
Financial Statements:
Financial statements represent the final accounting reports for accounting period. Business owners use information to review the profit or economic wealth generated by their company. Financial statements can also provide business owners with documents for obtaining external financing or other necessary economic resources for business.
Auditor check all the process from start to end, he may do audit on sampling basis, if there he found any error then he must report it and if no error then he also give the report and at the end he stated that he I not responsible for anything because audit is conducted on sample basis.
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The impact of internal audit on organization?
Internal audit reveals to management whether internal control procedures are duly followed or not.
What is the purpose of an internal audit?
Main purpose of internal audit is to establish internal control system as well as procedures which ensures that all departments works as per policies and procedures established by management of business as well as to help external auditors in conducting external audit.
What is asserted in an operational audit?
In an operational audit, the management of an organization asserts that the operations of the organization are being conducted in accordance with management's established policies and procedures.
What ultimately determines the specific audit procedures necessary to provide an independent auditor with a reasonable basis for the expression of an opinion?
Auditor's judgement
What is work through test in audit test?
In audit there is no such thing as a work through test. What exists is a walk through test. This test- Walk through test is a test for the auditors to determine the reliability of the client's accounting and internal control procedures.
What is the Difference between HR audit And Financial Audit?
Under HR Audit, audit of HR procedures and process is done while in financial audit, audit of finance related matters are done.
What procedures need to be done after a safety audit is complete?
No
How do you audit share based payments and special purposes entities?
examples of audit procedures for share based options
The impact of internal audit on organization?
Internal audit reveals to management whether internal control procedures are duly followed or not.
Audit procedure for letter of credit?
The audit procedure for letter of credit ensures the compliance of sanctions and post sanction procedures.
What is a surveillance audit?
A survelliance audit is a process where current procedures are checked and verified against the company's quality management system.
What is audit procedures?
Audit procedure is the process followed while auditing an entity which may include:Confirm the audit assignmentComplete appropriate planningExecute actual internal audit workDevelop a report
What is audit client screening and what are audit client screening procedures?
During an audit, a client may be screened before the actual audit to inform them of what will take place. This is a time to give them information on what to bring and answer questions.
What is the purpose of an internal audit?
Main purpose of internal audit is to establish internal control system as well as procedures which ensures that all departments works as per policies and procedures established by management of business as well as to help external auditors in conducting external audit.
What are analytical procedures?
Analytical procedures are "one of many financial audit processes which help an auditor understand the client's business and changes in the business, and to identify potential risk areas to plan other audit procedures." So essentially these are the procedures that an auditor goes through to look at risks within the business.
What is asserted in an operational audit?
In an operational audit, the management of an organization asserts that the operations of the organization are being conducted in accordance with management's established policies and procedures.
Audit program for creditors?
Step involved to determine the compliance to procedures and internal controls
