Basic Concepts of Auditing

Types of Audit

         • Statutory audit

         • Non-statutory audit

A non- Statutory audit may be a sort of audit which isn't legally required.

Statutory audits mainly specialize in financial activities whereas a non-statutory audit isn't limited to financial reporting.

Non-constitutional audits can be second-hand for any part of an society.

Scope of Audit

Basic Concepts of Auditing

Capacity of audit means personality, occasion, and coverage of audit measures that are needed to attain the generally purpose of audit (i.e. to attain levelheaded declaration that monetary statements are free from material misstatement).

Capacity of audits is resolute by ISAs, lawful and expert necessities, and auditor’s skilled decision.

An audit also contain:

Consideration of danger of objects misstatement. In making a danger consideration, the auditor believe the understanding of the body.

And understanding of control relevant to the preparation of monetary statements.

Assess the correctness of office rules, the sensibleness of office estimation.

And overall presentation of financial statement.

Main Requirements for Audit

For the successful completion of an honest audit, it's necessary that auditor has the subsequent attributes throughout the audit engagement: Characteristic Explanation

Specialized Decision

Specialized decision is that the application of Cumulative Audit Knowledge, Experience.

And Training, in several circumstances, to succeed in an appropriate course of action or conclusion.

Application of professional judgment is important to suits ISAs.

Specialized Cynicism

Specialized Cynicism is an approach that contain quizzical the mind (being alert to state of affairs that may specify potential misstatement).

And critical assessment of audit evidence. As a result, auditors should not consider the whole thing management inform.

He should remain aware of circumstances that indicate the possibility/risk of misstatement or fraud.

Regulatory Bodies of Audit

International Federation of Accountants.

IFAC is that the world organization of professional accountants dedicated to serving the general public interest by strengthening the profession within the area of auditing, ethics, professional education and public sector.

IFAC’s task is to supply the all-purpose public awareness by:

Development of high-quality standards and guidance.

Make possible the acceptance and accomplishment of principles and leadership.

Promoting the value of professional accountants worldwide

Speaking out on public interest issues.

IFAC includes following four boards:

International Auditing and Assurance Standards Board (IAASB)

International Accounting Education Standards Board (IAESB)

International Ethics Standards Board for Accountants (IESBA)

International Public Sector Accounting Standards Board (IPSASB).

International Auditing and Assurance Standards Board: IAASB is one among the boards within IFAC.

It supply the public awareness by attractive the excellence and reliability of auditing and assurance perform right through the world.

It is a average-locale body that issues principles to be applied in as long as the audit, analysis, and related services.

It also provides facilitation within the adoption and implementation of international standards.