International Audit Month on May, 2021: International accounting (auditing)?
May, 2021 is International Audit Month 2021. International Internal Audit Awareness Month International Internal Audit
Please understand, if you work on international assignments, there's less and less travel. You will be at a cubical or local office of a large multi-national client. Email and shared service centers have reduced or eliminated much travel.
As for not crunching numbers all day...sorry to tell you that accounting degree + audit job = crunching numbers all day, no matter how you slice it...don't know what you were expecting for audit work, but that's the drill, son.
Now, if you work in IT Audit and do system integration, you would get some travel, after the 20 hour work day. Sure you'll get off a plane the night before, sleep four hours, be at the client by 6:00 am and bust your tail until near midnight...
See, the business travel thing doesn't include fancy dinners and walks on the beach at noon, it's still stuck in a cube for 18 hours a day...not saying this to scare you off, but in spite of what you may have heard or dreamed about, it's a very rough spot to work in and the impact on your social life is HUGE...say goodbye to the friends and girlfriend, because they're gone.
help pls..gather audit evidence by observation..?
ISA 500 Audit Evidence is one of the International Standards on Auditing. It serves to expect the auditor is to obtain audit evidence from an appropriate mix of tests of control systems and substantive tests of transaction and balances.
It requests the auditor to obtain 'sufficient' and 'appropriate' audit evidence in order to draw reasonable conclusions on which to base the audit opinion.
The auditor considers reliability of audit evidence collected. For instance, audit evidence is more reliable when it exists in documentary form rather than subsequent oral representation of the matters. Auditors consider reliability of information but involve little authentication of evidence.
The rules/standards of audit evidence dictate that the evidence gathered during the audit be:
1. Sufficient, persuasive. This requires the exercise of good professional judgement. Audit evidence from the most to least persuasive include: physical examination; externally prepared; observations; inquiries/testimonial.
2. Competent. Obtaining the best quality of evidence available.
3. Useful. Evidence supporting goals and objectives.
4. Relevant. Evidence needs to be logical and sensible relative to the audit finding.
Human observations are biased toward confirming the observer's conscious and unconscious expectations and view of the world; we "see what we expect to see". In psychology, this is called confirmation bias. Since the object of scientific research is the discovery of new phenomena, this bias can and has caused new discoveries to be overlooked. One example is the discovery of X-rays. It can also result in erroneous scientific support for widely held cultural myths, for example the scientific racism that supported ideas of racial superiority in the early 20th century, and creation science today. Correct scientific technique emphasizes careful recording of observations, separating experimental observations from the conclusions drawn from them, and techniques such as blind or double blind experiments, to minimize observational bias.
Financial statement assertions
It is stated in ISA 500 that the auditor should use assertions for classes of transactions, account balances, and presentation and disclosures in sufficient detail to form a basis for the assessment of risks of material misstatement and the design and performance of further audit procedures.
The auditor uses assertions in assessing risks by considering potential misstatements that may occur, and thereby designing audit procedures that are responsive to the particular risks.
Assertions used by the auditor fall into the following categories:
(a) Assertions about classes of transactions and events for the period ended:
(b) Assertions about account balances at the period end:
Rights and obligations
Valuation and allocation
(c) Assertions about presentation and disclosure:
Classification and understandability
Accuracy and valuation
The assertions are not individually assessed but quite often at the same time. For example, to ensure completeness of electricity expense, the auditor ensures the 12 months of payments were booked. Since the client may record the bills paid on a cash basis, electricity expense of a month of previous basis period might be entered in the current year. Electricity expense of last month of current year might be recorded next year.If the monthly fluctuation is immaterial, the auditor always ignore the cut-off issue. In case where electricity is a material expense, the auditor considers preparing adjustments for year ended cut-off purpose so that the profit or loss would not be materially misstated.
Methods or techniques of audit evidence gathering are classified in 6 categories:
Audit evidence obtained directly by the auditor (for example, observation of the application of a control) is more reliable than audit evidence obtained indirectly or by inference (for example, inquiry about the application of a control).
obligations or the valuation of the assets. Inspection of individual inventory items ordinarily accompanies the observation of inventory counting. For example, when observing an inventory count, the auditor may inspect individual inventory items (such as opening containers included in the inventory count to ensure that they are not empty) to verify their existence.
Observation consists of looking at a process or procedure being performed by others. Examples include observation of the counting of inventories by the entity's personnel and observation of the performance of control activities. Observation provides audit evidence about the performance of a process or procedure but is limited to the point in time at which the observation takes
What are the differences between an external and internal audit?
You should be able find a more complete list in your textbook. I think internal audit is WAY more fun than external audit.
The external auditors issue an opinion on the fairness of the financial statements taken as a whole. The internal auditirs are regular employees of the company they audit. Internal audits generally examine internal controls and the main purpose is to recommend improvements in efficiency and operational effectiveness. The materiality level for an internal audit is much lower than for an external audit. An external auditor will never examine petty cash, but an internal auditor will.
The external auditors are organizationally independent - they work for a completely different company than the company being audited. The also get paid more - the internal auditors receive their regular salary, regardless of their findings. The external auditors get paid based on their contract which includes expenses, overhead and profit.
The external auditors issue an opinion on the fairness of the financial statements taken as a whole. The internal auditors may issue an opinion on a much smaller unit they may be auditing, but often they do not.
External auditors are required to follow generally accepted auditing standards ( or international auditing standards), internal auditors do not. The internal audits may follow GAAS, they may follow IIA standards, or they may not follow any special standard.
An internal audit may cover a time perior of a week, month or quarter. An external audit generally covers a year.
You need an external audit every year because you have a new set of financial statements every year, and the internal control environment may have changed since the last audit, creating opportnities for inaccuracies and fraud to make the financial statements inaccurate or misleading.
Good internal auditors are like independent efficiency consultants and good managers look forward to having then provide their services. External auditors don't provide much of real value to the line management of a company. Internal auditors may charge the department they audit an internal charge, but often the manager can request their services for free.
Im hoping for at least a "B".
This is the best I can do at 6am off the top of my head.