ACCT 4360 Lecture Notes - Internal Control, Caro, Financial Statement
Document Summary
This audit and assurance standard is the first audit standard issued by the. Describes the fundamentals of auditing, which define the duties of auditors: thorough examination of all systems. The primary purpose of an audit is to evaluate all systems and processes related to accounting and financial operations. Before starting an audit, the auditor must first understand the system and how it works. This is the foundation of the entire testing process: internal controls assessment. The scope of the audit is determined by the effectiveness of the organization"s internal control system. If a company"s internal controls are in place and highly effective, auditors can rely on that system. That way he doesn"t have to dig into accounting. On the other hand, if internal controls are ineffective, auditors must go through accounts at their own pace. Auditors should also assess the internal control system in accordance with caro: arithmetic precision. Accountants should also regularly check the accuracy of their accounting.