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CIS Chapter 1
CIS Chapter 1
, CPA
Chapter 1 - Auditing and Internal Controls Notes
▪ Overview of Auditing, its types, and differences from other types of services
▪ A look back on how External audit is conducted and its components
▪ Audit risk
▪ Internal controls - History, Design, Objectives
Types of Audits
External audits are independent attestation performed by an expert - the auditor - who expresses an
opinion regarding the presentation of the financial statements.
▪ Scope of work
▪ Frequency of problems addressed
▪ Regulatory requirements
Internal audits are independent appraisal function established within an organization to examine and
evaluate its activities as a service to the organization.
Adequate technical training and Audit work must be adequately Statement in the report that FS is
proficiency planned prepared in accordance with
Financial reporting standards
Management assertions
Existence/Occurrence
Completeness
Auditing in CIS Environment Mr. Edgar D. Dalumpines, Jr., CPA
Chapter 1 - Auditing and Internal Controls Notes
Materiality
Communicating results
Audit risk is the risk that an auditor may not be able to detect misstatements whether due to fraud or error.
Components:
▪ Inherent risk
▪ Control risk
▪ Detection risk
Objectives:
Principles:
Management's Responsibility
Limitations
Reasonable Assurance
Preventive control
Detection control
Corrective control