Auditing Theory Chapter 1 Part 1 PDF

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Chapter 1 AUDIT – An OverviewAudit in General1 auditing financial statements, the primary concern is with a. Determining whether recorded information properly reflects the economic events that occurred during the accounting period. b if fraud has occurred. c if taxable income has been calculated cor...

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Ch a p t e r 1AUDI T–AnOv e r v i e w Au d i t i nGe n er a l 1 . Wh e na u d i t i n gfi n a n c i a l s t a t e me n t s , t h ep r i ma r yc o n c e r ni swi t h a . De t er mi n i n gwh e t h e r r e c o r d e di n f o r ma t i o np r o p e r l yr e fl e c t st h ee c o n o mi ce v e n t st h a t o c c u r r e dd u r i n gt h e a c c o u n t i ngp e r i o d . b . De t er mi n i n gi f f r a u dh a so c c u r r e d . c . De t er mi n i n gi f t a x a b l ei n c o meh a sb e e nc a l c u l a t e dc o r r e c t l y . d . An a l y z i n gt h efi n a n c i a l i n f o r ma t i o nt ob es u r et h a t i t c o mp l i e swi t hgo v e r n me n t r e q u i r e me n t s . 2 . Re c o r d i n g , c l a s s i f y i n g , a n ds u mma r i z i n ge c o no mi ce v e n t si nal o g i c a l ma n n e rf o r t h ep u r p o s eo f p r o v i d i n g fi n a n c i a l i n f o r ma t i o nf o r d e c i s i o nma k i n gi sc o mmo n l yc a l l e d a . Fi n a n c e b . Au d i t i n g c . Ac c o u n t i n g d . Ec o n o mi c s 3 . Th et r a i t t h a t d i s t i ng u i s h e sa u d i t o r sf r o ma c c o u n t a n t si st h e a . Au d i t o r ’ sa b i l i t yt oi n t e r p r e t a c c o u n t i n gs t a n d a r d s b . Au d i t o r ’ se d u c a t i onb e y o n dt h eBa c h e l o r ’ sd e g r e e c . Au d i t o r ’ sc on t i n u i n gp r o f e s s i o n a l d e v e l o p me n t d . Au d i t o r ’ sa c c u mu l a t i o na n di n t e r p r e t a t i o no f e v i d e n c er e l a t e dt ot h ec o mp a n y ’ sfi n a n c i a l s t a t e me n t s . 4 . Th es u b j e c t ma t t e r o f a n ya u d i t c o n s i s t so f s e r t i o n sa b o u t e c o n o mi ca c t i o n sa n de v e n t s a . As b . Ec o n o mi cd a t a c . Fi n a n c i a l s t a t e me n t s d . Op e r a t i n gd a t a 5 . Ana u d i t i n v o l v e sa s c e r t a i n i n gt h ed e g r e eo f c o r r e s p o n d e n c eb e t we e na s s e r t i o n sa n de s t a b l i s h e dc r i t e r i a . I nt h e c a s eo f afi n a n c i a l s t a t e me n t a u d i t , wh i c ho f t h ef o l l o wi n gi sn o t av a l i dc r i t e r i o n ? i l i p p i n eSt a n d a r d so nAu d i t i n g a . Ph b . Ph i l i p p i n eFi n a n c i a l Re p or t i n gSt a n d a r d s c . PFRSf o r Sma l l a n dMe d i u ms i z e dEn t i t i e s d . PFRSf o r Sma l l En t i t i e s 6 . Th ec r i t e r i af o re v a l u a t i n gq u a n t i t a t i v ei n f o r ma t i o nv a r y . Fo r e x a mp l e , i nt h ec a s eo f a ni n d ep e n d e n t a u d i t o f fi n a n c i a l s t a t e me n t sb yCPAfi r ms , t h ec r i t e r i aa r eu s u a l l yt h e a . Ph i l i p p i n eSt a n d a r d so nAu d i t i n g i l i p p i n eFi n a n c i a l Re p or t i n gSt a n d a r d s b . Ph c . Na t i o n a l I n t e r n a l Re v e n u eCo d e d . Re g u l a t i o n so f t h eSe c u r i t i e sa n dEx c h a n g eCo mmi s s i o n 7 . Mo s t o f t h ei n d e p e n d e n t a u d i t o r ’ swo r ki nf o r mu l a t i n ga no p i n i o no nt h efi n a n c i a l s t a t e me n t sc o n s i s t so f a . Ob t a i n i n ga n de x a mi n i n ge v i d e n c e b . Ex a mi n i n gc a s ht r a n s a c t i o n s c . Co mp a r i n gr e c o r d e da c c o u n t a b i l i t ywi t ha s s e t s d. St u d y i n ga n de v a l u a t i n gi n t e r n a l c o n t r o l...