Types of audits
- Financial statements
Are on goods and services
Government deducts it on your cpp, and other taxes, where
Tax deducted on personal income.
Revenue Canada does not use GAAP because business can lower tax.
They will make decisions on how much can a corporation deduct.
- Non-profits don’t get audited for tax.
- Internal audit department, are the employs within the corporation.
- Internal audits report to Chief financial officer
- Help company accomplish objectives
- Not necessary to do internal audits. Mostly publically traded
companies will have internal audits or growing companies.
- Compliance with laws, regulations and contracts.
- Reliability and integrity of financial and operational information.
- Effectiveness and efficiency of operations.
- Companies prepare information to be used by financial decision
- Theses companies do so to obtain loan or sell stock.
Example. If you were buying a variety store, you would want to
look at its statements.
- Verification reduces the risk about the information misleading. Relationship between accounting and auditing
o Doesn’t include financial report production
o Auditing in financial reporting is a process of reducing information