Scribd Logo
Upload

Welcome to Scribd!

  • CIS Chapter 1

    Uploaded by

    Michelle Ann
    323 views2 pages
    This document discusses auditing and internal controls. It provides an overview of different types of audits like external, internal, and fraud audits. External audits are independent assessments of financial statements, while internal audits appraise an organization's activities. The document also examines financial audit standards, components, risks, and internal control objectives like safeguarding assets and ensuring accurate records. It outlines principles of internal controls and the PDC model of preventive, detection, and corrective controls.

    Original Description:

    Sample

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    This document discusses auditing and internal controls. It provides an overview of different types of audits like external, internal, and fraud audits. External audits are independent assessments of financial statements, while internal audits appraise an organization's activities. The document also examines financial audit standards, components, risks, and internal control objectives like safeguarding assets and ensuring accurate records. It outlines principles of internal controls and the PDC model of preventive, detection, and corrective controls.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    323 views2 pages

    CIS Chapter 1

    Uploaded by

    Michelle Ann
    This document discusses auditing and internal controls. It provides an overview of different types of audits like external, internal, and fraud audits. External audits are independent assessments of financial statements, while internal audits appraise an organization's activities. The document also examines financial audit standards, components, risks, and internal control objectives like safeguarding assets and ensuring accurate records. It outlines principles of internal controls and the PDC model of preventive, detection, and corrective controls.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 2

    Auditing in CIS Environment Mr. Edgar D. Dalumpines, Jr.

    , CPA
    Chapter 1 - Auditing and Internal Controls Notes

    In this chapter we aim to discuss:

    ▪ 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

    1. External Audits (Financial Audits)


    2. Internal Audits
    3. Fraud Audits

    External audits are independent attestation performed by an expert - the auditor - who expresses an
    opinion regarding the presentation of the financial statements.

    External audits are different from Advisory services in:

    ▪ 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.

    Financial Audits - GAAS

    General standards Field work standards Reporting standards

    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

    Independence Sufficient understanding of Statement in the report of


    internal control structure inapplicability of Financial
    reporting standards

    Professional due care Sufficient appropriate evidence Scope limitations, if any

    Contains expression of the


    auditor's opinion on the FS as
    whole

    Financial Audits - Components

    Management assertions

    Existence/Occurrence
    Completeness
    Auditing in CIS Environment Mr. Edgar D. Dalumpines, Jr., CPA
    Chapter 1 - Auditing and Internal Controls Notes

    Rights and Obligations


    Valuation or Allocation
    Presentation and Disclosure

    Materiality

    Obtaining audit evidence

    Communicating results

    Financial Audits - Audit risk and components

    Audit risk is the risk that an auditor may not be able to detect misstatements whether due to fraud or error.

    Error VS. Fraud

    Components:

    ▪ Inherent risk
    ▪ Control risk
    ▪ Detection risk

    Audit risk model - AR = IR x CR x DR

    Internal Controls - Objectives, Principles, Models

    Objectives:

    1. Safeguard assets of the firm


    2. Ensure accuracy and reliability of accounting records and information
    3. Promote efficiency in the firms operations
    4. Measure compliance with management's prescribed policies and procedures

    Principles:

    Management's Responsibility

    Methods of Data Processing

    Limitations

    Reasonable Assurance

    The PDC Model

    Preventive control

    Detection control

    Corrective control

    You might also like