AUDITING HOMEWORK HELP
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Auditing
An audit is a systematic and independent examination of books, accounts, statutory records, documents and vouchers of an organization to ascertain how far the financial statements, as well as non-financial disclosures, present a true and fair view of the concern. It also attempts to ensure that the books of accounts are properly maintained by the concern as required by law. Auditing has become such a ubiquitous phenomenon in the corporate and the public sector that academics started identifying an "Audit Society". The auditor perceives and recognizes the propositions before them for examination, obtains evidence, evaluates the same and formulates an opinion on the basis of his judgment which is communicated through their auditing report.
FIELDS OF AUDITING
These are the following categories of auditing:
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Compliance Audit
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Financial Audit
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Tax Audit
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Investigation Audit
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Construction Audit
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Operational Audit
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Information Systems Audit
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Compliance Audit
In this branch of auditing, the auditor examines an entity’s policies and procedures. This is to check if the establishment complies with the internal standards. This type of audit is usually conducted in educational institutions or regulated industries.
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Financial Audit
In this branch of auditing, the auditor analyzes how far the information that exists within the financial statements of an entity is. Usually, an independent CPA firm carries out this standard auditing.
· Tax Audit
This is another common auditing that is conducted to examine the tax returns submitted by an organizer or individual. This helps an auditor to see if the tax-related information and payment made by the concerned individuals are valid. Usually, these audits are carried out where the tax payment is excessively low.
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Investigative Audit
This type of audit is concerned with the suspicion regarding fraudulent activity. The investigation is done on any specific individual or area to detect and resolve control breaches. Other than this, the investigative audit is also done to gather evidence and bring charges against someone.
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Construction Audit
This special audit is carried out to analyze the cost of a certain construction project. This may include examining the contracts, prices paid, time taken to complete the project, overhead costs, etc. The auditor checks if the reasonable expenses were incurred for a particular project.
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Operational Audit
This branch of auditing deals with the process comprising the goals, procedures, results, and planning processes of a business. This audit can be conducted internally or with the help of an external entity.
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Information Systems Audit
Information systems audit involves reviewing the control over data processing, software development, and access to computer systems. Through this auditing, any problem that can damage the IT system’s ability to give correct information is detected. Another goal of this auditing is to restrict access to unauthorized parties.
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