Auditing Presentation 1
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WHAT TO EXPECT IN AN AUDIT
An Overview of External Audit Processes
Introduction
Companies are subject to the scrutiny of several different auditing bodies. In addition, several companies have their own review department called Audit & Management Advisory cell. Routine Audit Focus- usually budget and finance but may also include programmatic and support areas. Business Officers are responsible for management of company’s resources. They generally provide the justification for appropriateness of costs incurred and financial transactions executed by departments / units they represent.
Definition of Audit
A formal process where activities and records are examined and compared to predetermined audit criteria such as : Statutory
regulatory requirements SECP policies and procedures Management goals and objectives
External Audit Planning Process ✜ High
Risk Audits ✜ Special Reviews/Management Requests ✜ Audit Committee Representation as Requested ✜ Internal Control Education ✜ Internal Audit Coordination ✜ Financial Process Self-Assessment
Types of Audits Planned Audits - Audits on the annual plan. Special Request Audits- Audits requested by
Client’s management as needed.
Investigations-Audits conducted in accordance with Auditing and Accounting Standards (ISA & IAS).
Types of External Audit Services
Small Consultations
Other Advisory Services
Business Process Self-Assessment (BPSA)
External Audit
Audits can be broadly grouped into two categories. Both may include the evaluation of systems of internal control. Financial
Audits
Determine the reliability and accuracy of financial records
Performance
Audits
Determine the economy and efficiency of resources
Audit Agencies
Securities
and Exchange Commission of Pakistan (SECP)
Regulatory
Bodies
Audit Agencies
Accounting
Bodies, ICAP, ACCA, ICAEW Taxation Authorities Lenders/ Finance Providers
Audit Agencies Audit Service Providers Price
Waterhouse Coopers Firm Ernst & Young Delloite & Touche KPMG
The Audit Process
While each agency’s audit process is specific to its own environment, most audit processes are similar to those listed in the following steps:
The Audit Process
Notification
Initial Discussion
Audit Plan
Opening Conference
The Audit Process Field Work is performed to:
Collect detail information based upon audit scope Record findings in audit working papers Interview Client personnel as appropriate Review departmental files and support documents Review of applicable policies and procedures & regulatory requirements Conduct sample selection and testing of transactions
The Audit Process
Interim Findings or Draft Report is based on field work conducted, and usually contains the following: An evaluation of the effectiveness and appropriateness of Client’s control systems if an external review and departmental control processes if an internal review Compliance with established policies and procedures and / or applicable regulatory requirements
Closing Conference
The Audit Process
Final Audit Report
Action Plan
Follow -up Audit / Review
The Audit Process A Word About Documentation During an external audit, is very common for an auditor to request copies of Client’s documentation. The collection of data is a normal part of an auditor’s fieldwork and supports the opinions that he/she will render.
The Audit Process Remember the following concerning documentation:
Provision of documentation may be subject to negotiation between Client and the audit Firm
Management should be informed of and approve release of any documents requested by the auditor
The Audit Process
Copies of documents should be retained in your files or by Client if determined appropriate
Never send documents to an external audit Firm that is not part of an official approved audit
Where Do I Go For Help?
Contact Firm or Discuss within the Management for assistance on any matter involving an audit
Firm is responsible for external audit coordination and for formulating Client’s official audit response
Where Do I Go for Help ? Your are not alone Give Your Firm a Call whenever you need
Audit & Management Advisory Services ABC Firm & Co
An Overview of External Audit Processes
Introduction
Companies are subject to the scrutiny of several different auditing bodies. In addition, several companies have their own review department called Audit & Management Advisory cell. Routine Audit Focus- usually budget and finance but may also include programmatic and support areas. Business Officers are responsible for management of company’s resources. They generally provide the justification for appropriateness of costs incurred and financial transactions executed by departments / units they represent.
Definition of Audit
A formal process where activities and records are examined and compared to predetermined audit criteria such as : Statutory
regulatory requirements SECP policies and procedures Management goals and objectives
External Audit Planning Process ✜ High
Risk Audits ✜ Special Reviews/Management Requests ✜ Audit Committee Representation as Requested ✜ Internal Control Education ✜ Internal Audit Coordination ✜ Financial Process Self-Assessment
Types of Audits Planned Audits - Audits on the annual plan. Special Request Audits- Audits requested by
Client’s management as needed.
Investigations-Audits conducted in accordance with Auditing and Accounting Standards (ISA & IAS).
Types of External Audit Services
Small Consultations
Other Advisory Services
Business Process Self-Assessment (BPSA)
External Audit
Audits can be broadly grouped into two categories. Both may include the evaluation of systems of internal control. Financial
Audits
Determine the reliability and accuracy of financial records
Performance
Audits
Determine the economy and efficiency of resources
Audit Agencies
Securities
and Exchange Commission of Pakistan (SECP)
Regulatory
Bodies
Audit Agencies
Accounting
Bodies, ICAP, ACCA, ICAEW Taxation Authorities Lenders/ Finance Providers
Audit Agencies Audit Service Providers Price
Waterhouse Coopers Firm Ernst & Young Delloite & Touche KPMG
The Audit Process
While each agency’s audit process is specific to its own environment, most audit processes are similar to those listed in the following steps:
The Audit Process
Notification
Initial Discussion
Audit Plan
Opening Conference
The Audit Process Field Work is performed to:
Collect detail information based upon audit scope Record findings in audit working papers Interview Client personnel as appropriate Review departmental files and support documents Review of applicable policies and procedures & regulatory requirements Conduct sample selection and testing of transactions
The Audit Process
Interim Findings or Draft Report is based on field work conducted, and usually contains the following: An evaluation of the effectiveness and appropriateness of Client’s control systems if an external review and departmental control processes if an internal review Compliance with established policies and procedures and / or applicable regulatory requirements
Closing Conference
The Audit Process
Final Audit Report
Action Plan
Follow -up Audit / Review
The Audit Process A Word About Documentation During an external audit, is very common for an auditor to request copies of Client’s documentation. The collection of data is a normal part of an auditor’s fieldwork and supports the opinions that he/she will render.
The Audit Process Remember the following concerning documentation:
Provision of documentation may be subject to negotiation between Client and the audit Firm
Management should be informed of and approve release of any documents requested by the auditor
The Audit Process
Copies of documents should be retained in your files or by Client if determined appropriate
Never send documents to an external audit Firm that is not part of an official approved audit
Where Do I Go For Help?
Contact Firm or Discuss within the Management for assistance on any matter involving an audit
Firm is responsible for external audit coordination and for formulating Client’s official audit response
Where Do I Go for Help ? Your are not alone Give Your Firm a Call whenever you need
Audit & Management Advisory Services ABC Firm & Co
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