Steps of internal Auditing

1. Planning: The audit process begins with planning the audit. First you Notify everyone
about the audit, Organize a pre-audit meeting, Personnel from the department should be
interviewed, Check out the policies and procedures, Recognize and Document Business
Processes, Conduct a risk assessment, Prepare a thorough audit plan, Prepare a budget for
the audit (in hours) and Choose the items that will be audited (samples, not 100 percent ).

2. Fieldwork: is the second phase of the audit. During this phase, the audit team will be
doing the audit on-site at the audit client's location. The processes listed below are some
of the most common ones used during fieldwork. They are Examine supporting
documentation and conduct interviews with department staff, Identify the Outliers,
Identify Improvement Recommendations, Prepare audit comments in writing (i.e.,
findings) and for the findings, the department provides a written response and a
corrective action plan.

3. Reporting: The audit's third phase is reporting. During this phase, the lead auditor will
write an audit report that summarizes and conveys the audit findings. In this Phase you
Prepare a draft report, consult with the unit's management about the prepared report,
Publish the final report, the report is accurate, brief, and written in a suitable tone,
distribution of the report: President, Vice President, Executive, Auditors from outside the
company, Managing Director of Finance, Controller, Subcommittee on Audit, Vice
President of Divisions or Senior Vice President of Divisions and Head of Department.

Steps of External Auditing

Preparing an Audit plan: The auditor examines the information included in the papers
and maps out how the audit will be conducted in the first stage of an external audit. A
workshop could be held to identify potential future issues. After then, a plan for auditing
was created.

Obtaining an Understanding of the Client: The Auditor must gain a thorough

understanding of a company in order to assess the risk of substantial misstatement on
financial statements and to plan the nature, timing, and scope of additional audit
processes. Inquiries of management and others within the entity, analytical techniques,
observation and inspection, and other procedures are among the risk assessment
processes utilized here.
Assessing the risk of Misstatement: When gaining a better understanding of the client,
the auditor should use the information gathered And its surroundings to identify
transaction classifications, account balances, and disclosures that may be materially
incorrect. Risk assessment, on the other hand, supplies auditors with proof of potential
material misstatement risks. For relevant claims, the risks of substantial misrepresentation
are made up of inherent and control risks. Inherent risk refers to a relevant assertion's
vulnerability to material falsification in the absence of corresponding controls.

Performing tests of Controls: are used to assess whether important controls are
correctly designed and running. Consider the control activity in which the accounting
department records the serial sequence of all shipping papers prior to producing the
associated journal entries. This check is important because it ensures that each shipment
of product is properly recorded in the accounting records.

Completing the Audit: In addition, the audit was completed, and some procedures were
re-performed to guarantee their validity. Final decisions on financial statement
disclosures are made at this point. Senior management will meet with the auditor to
discuss the results.

Audit Report: When the examination and the results are satisfactory, a standard
unqualified audit report is provided. As the audit examination deviates from typical, this
report is likewise amended.