Auditing Week 1

Question 1

6 questions when considering an audit

Answer 1

1. Do we need an audit
2. What to consider when choosing an auditor
3. What to consider during engagement
4. Stages of auditing
5. After audit is complete
6. Is the work satisfactory

Question 2

Expand on “do we need an audit?”

Answer 2

1. Is there a legal requirement and will it improve the credibility for investors (comforting the user of information that its reliable)
2. internal audit such as looking and systems and controls or external audit for external review on accounts.

Question 3

Expand on “what to consider when choosing an auditor?”

Answer 3

1. Track record
2. Independence (no conflict of interests)
3. Integrity and ethics (will he do the right things and take responsibility of their actions when things go wrong)
4. Price (has he undercut price with intention of adding overruns for profit)

Question 4

Expand on “what to consider during engagement as an auditor”

Answer 4

1. Client risk assessment (will the employer be cooperative with information demands, price negotiations and is there possibility of losing money on the job)
2. Analysing resources (do we have enough information to carry out the job)

Question 5

Expand on “stages of auditing as an auditor”

Answer 5

1. Planning (discussing with client/employer the objective and deliverables on the job)
2. Evidence & audit judgement (reviewing relevant information and making judgements)
3. Materiality (finished product)

Question 6

Expand on “after audit is complete as an auditor”

Answer 6

1. Communicate with client the process and if issues arise

2. Sign off final report that the work has met standards and client demands

Question 7

Stages of “is the work good enough”

Answer 7

1. 3rd party review to ensure work has been completed to standard and measures have been taken and presents a fairview