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It is the systematic review for evaluative purposes of dependency or entity or part of it, which is carried out to determine if the organisation is operating efficiently to meet the objectives entrusted to it within the Federal Public Administration. It is a search to locate problems related to efficiency within the organisation.


The administrative audit covers a review of the objectives, plans and programs of the agency or entity. It also studies the organic structure, hierarchical level and quality of human and material resources, training and training programs, division of activities and supervision. Furthermore, there is existence and application of organisation manuals, self-evaluation mechanisms, Functions, systems, procedures and controls, the facilities and the environment in which it is developed, depending on the operation efficiency and the cost savings.

The result of the administrative audit is an opinion on the administrative efficiency of the entire unit or entity.

The financial audit involves the review of the financial information of a company on a given date and is performed before the presentation of the financial statements (usually on an annual basis).

PLANNING AND EVALUATION OF RISKS IN THE AUDIT

Before the date on which the opinion will be issued.

The main objectives are:

  • Understand the business of the company and the environment in which it operates.
  • Industry in question, regulations and other external factors, including the applicable financial reporting framework.
  • The nature of the entity.
  • Accounting criteria applied by the entity.
  • Analysis of the risks that can lead to significant errors in the financial statements.
  • The measurement and review of the previous and intermediate financial results of the entity.
  • Determine the most important audit risks (that is, the possibility that the auditor issues a wrong opinion).

EVALUATION OF INTERNAL CONTROLS IN THE AUDIT

After the date on which the opinion will be issued

The main Objective:

Evaluate the operational effectiveness of the organisation's internal controls (for example, authorisation of transactions, reconciliations of accounts, separation of functions), including general IT controls. If internal controls are effective, this will reduce (but not eliminate) the amount of work of the auditor.

SUBSTANTIVE PROCEDURES

After the date on which the opinion will be issued. Collect audit evidence that supports the figures collected in the financial statements are reliable and in accordance with standards and legislation.

Material and methods:

  • Where internal controls are strong, auditors often rely more on analytical procedures (comparison of financial information systems, and with non-financial information, to see if the numbers make sense and that unexpected movements can be explained).
  • Where internal controls are weak, auditors often rely more on substantive tests of detail (selection of a sample of the balances of large accounts, and concrete evidence (for example, invoices, bank statements).

COMPLETION OF THE AUDIT

After the date on which the opinion will be issued.

Purpose:

  • Make a report regarding any important issue that caught the attention of the auditor during the execution of the audit.
  • Evaluate and review the audit evidence obtained, which allows a sufficient and appropriate record of the conclusions reached.
  • Consider the type of audit opinion that will be notified. Opinion with or without qualifications to the financial information of the company, or in extreme cases justifies the non-issuance of opinion.
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