AUDITS OF HISTORICAL FINANCIAL INFORMATION Learning Objectives * Define auditing. * Distinguish between auditing and accounting. * Distinguish between audits, assertion-based engagements, and assurance services * Enumerate and explain the different types of audit engagements. * Know the objective and scope of a financial statement audit.Learning Objectives * Explain the meaning of information risk and enumerate the different means to reduce information risk. * Be familiar with the unqualified audit report. *Give examples of the limitations of an audit. * Appreciate how auditing has evolved through human history. AUDITING + Auditing is a “systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established criteria and communicating the results to interested users.”Types of Audits Financial FSare fairly GAAP Audit report on the statements presented fairness of financial audit statements. Operational Operationalor Management Report on efficiency and audit performance data Objectives _ effectiveness, including constructive suggestions. Compliance Compliance with Laws, rules Degree of compliance audit applicablelaws and report. and regulations or regulations or management management policy. policy Overall Objectives in Conducting an Audit * The overall objective of an audit is to obtain reasonable assurance about whether the financial statements are from from material misstatement and to report ton the financial statements based on the auditors’ findings. + In completing these objectives, the auditor: + Complies with relevant ethical requirements + Plans and performs an audit with professional skepticism + Exercises sufficient and appropriate evidence on which to base the auditors’ opinion. + Conductsthe audit in accordance with professional auditing standards