Wednesday, December 19, 2012

Lesson-1 on Audit



Question: What is Auditing?
Answer:
An audit is an independent assessment of the fairness by which a company's financial statements are presented by its management. It is performed by competent, independent and objective person(s) known as auditors

Question: What is Risk Based Auditing (RBA)?
Answer:
Risk Based Auditing is an approach that focuses on the response of the organization to the risks it faces in achieving its goals and objectives.  It aims to give independent assurance that risks are being managed to an acceptable level and to facilitate improvements where necessary.

Question: What is Internal Audit?
Answer:
Internal Audit is the assurance and consulting service involving an independent review of an organization's records, operations and procedures to evaluate for efficiency, effectiveness, compliance and the existence of adequate internal controls to mitigate risks to the achievement of the organization's objectives.

Question: What is Audit Risk?
Answer:
Audit risk is the risk that auditors may give an inappropriate audit opinion on financial statements.

Question:  What is Audit Finding?
Answer:
Audit finding is the error, exception, deviation or deficiency noted by an auditor as a result of an examination of audit evidence. Findings generally relate to (a) compliance with policies, procedures and legal requirements, (b) adequacy and effectiveness of controls, and/or (c) efficiency and effectiveness of administration.

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