INTRODUCTION

TO
AUDITING
✓ Explain what is an Audit.

✓ Explain the purpose of an Audit.

✓ Explain the types of Audits.

✓ Discuss the History and Development of

Auditing.
“Auditing is a systematic and
independent examination of data,
statements, records, operations and
performance (financial or otherwise) of
an enterprise for a stated purpose.”
General Guidelines on Internal Auditing issued by the Institute of Chartered
Accountants of India
1. Enables the auditor to express an opinion
whether, apart from representing a true and fair
view of an entity’s finances; the financial
statements are prepared, in all material respects,
in accordance with the applicable financial
reporting framework.

2. Adds credibility and enhance the degree of

confidence of users of management’s financial
statements since there is the assurance that the
financial statements are free of material
misstatements.
3. Compliance with statutory requirements.

4.To detect and prevent frauds and errors.

5. To improve operational effectiveness and

efficiency
1. Classification based on the Auditor
➢ Internal audits
✓ https://www.accountingtools.com/articles/the-
difference-between-internal-and-external-audits.html

➢ External audits
✓ https://www.accountingtools.com/articles/2017/5/6/e
xternal-audit
2. Classification Based On Subject Matter
➢ Financial Audit – this involves an independent
examination of an entity's financial statements to
determine accuracy, as well as compliance with regulatory
standards.

➢ Operational Audit - this involves a detailed analysis of

the goals, planning processes, procedures, and results of
the operations of an entity to determine the effectiveness
and efficiency of the entity’s operations.

➢ Compliance Audit – this involves an independent

examination of an entity’s procedures and policies to
determine if it is complying with internal or regulatory
standards.
 3. Classification based on motive
➢ Statutory
✓ An independent examination of an entity’s records and
financial transactions that is required by either the law or
a regulatory authority.
➢ Mostly done for all registered public companies
/corporations.

➢ Non statutory
✓ Verify and review an entity’s financial report that is not
required by either the law or a regulatory authority.
✓ Mostly done for sole traders, small companies, limited
and unlimited liability partnerships, associations, clubs,
charitable trusts, and MCSTs.
✓ Usually done to identify the financial positions and
conditions of the businesses.
 https://www.youtube.com/watch?v=lThF1dB
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https://www.youtube.com/watch?v=wnusYfnWq
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https://iedunote.com/auditor-definition-qualities-
types

https://www.pwc.com/m1/en/services/assuranc
e/what-is-an-audit.html