An audit report is issued by independent external auditors to provide an opinion on a company's published financial statements. There are three types of opinions: unqualified, qualified, and disclaimer of opinion. Auditors obtain audit evidence through procedures like inquiry, observation, inspection, and analysis of financial statement data. Samples are taken for review using methods like statistical sampling or selecting high value, unusual, or random items. Internal audit reports evaluate areas like operations, compliance, finances, follow-ups, investigations, IT systems, and management performance.
An audit report is issued by independent external auditors to provide an opinion on a company's published financial statements. There are three types of opinions: unqualified, qualified, and disclaimer of opinion. Auditors obtain audit evidence through procedures like inquiry, observation, inspection, and analysis of financial statement data. Samples are taken for review using methods like statistical sampling or selecting high value, unusual, or random items. Internal audit reports evaluate areas like operations, compliance, finances, follow-ups, investigations, IT systems, and management performance.
An audit report is issued by independent external auditors to provide an opinion on a company's published financial statements. There are three types of opinions: unqualified, qualified, and disclaimer of opinion. Auditors obtain audit evidence through procedures like inquiry, observation, inspection, and analysis of financial statement data. Samples are taken for review using methods like statistical sampling or selecting high value, unusual, or random items. Internal audit reports evaluate areas like operations, compliance, finances, follow-ups, investigations, IT systems, and management performance.
▪ Issued by INDEPENDENT / external auditors, who are not on the company’s payroll. ▪ Included in the Published Financial Statements of companies; ALL users can read it, e.g. shareholders, employees, etc. ▪ Auditors issue an OPINION on the published financial statements. This opinion SHOULD indicate that users/readers can trust and believe the financial information (e.g. profit in the Income Statement, etc.) in the statements. ▪ External auditors base their opinion on their external audit after checking the accuracy of the information by sampling audit evidence (Internal auditors /accountants prepare the financial statements) ▪ THREE types of external audit opinions based on the reliability of the financial statements: o Unqualified = a ‘clean’ audit; there are no issues/challenges found; statements are credible and shareholders may believe the financial results. o Qualified = some issues were found that can make statements less credible. Directors will have an opportunity to explain or make changes to the statements. o Disclaimer of opinion = Auditors are not willing to issue any opinion as the statements and financial information are too flawed and does not meet IFRS standards. ▪ Audit evidence could be: o Data or information, physical or nonphysical, e.g. Financial statements; Accounting information; Bank accounts; Bank statements; Fixed Assets Registers; Payrolls; Invoices and other supporting documents. o In audio and/or video format or even verbal answers from key employees ▪ Procedures/Methods to obtain (gather) audit evidence: o Audit inquiry (asking questions) o Audit observations (e.g. look at how internal control measures are applied or stock is physically counted) o Audit inspections (e.g. compare asset register with the physical asset items in the company) o Audit procedure (analysis of data in the financial statements according to IFRS standards) o Recalculation (some depreciation expenses could be recalculated) o Re-performance (e.g. auditors prepare their own bank reconciliation and compare it with that of the company) ▪ Basis/Methods for sampling / gathering audit samples: External auditors do not check all the transactions / information in a company, but only samples (portions) thereof. These samples needs to be gathered carefully in the following basis/methods: o Statistical, e.g. a percentage of the total or the average number of transactions, etc.) o Non-statistical: - Value of items, e.g. the top ten highest value. - Items higher than a certain amount or value, e.g. items higher than R200 000. - Items that contain specific information, e.g. all purchasing transactions from ABC Ltd. - Random selection of items (no specific ‘rule’ for selecting items). - Systematic selection, e.g. every 10th payment per month, etc. - Haphazard selection (any item(s) could be selected which is representative). - Block selection, where samples are drawn from similar items, e.g. any 20 R/D cheques. - Monetary unit, e.g. all transactions in US-dollars. ▪ Types of Internal audit reports: o Operational audit - evaluates the performance of a particular department in the business. o Compliance audit – evaluates adherence to laws / regulations / policies, etc. o Financial audit – evaluates past financial data to ensure the financial activities of a department is fair, complete, accurate and reliable and is reflected as such in the company’s financial statements. o Follow up audit – conducted ± six months after the external audit report was issued to evaluate if corrective actions were taken and are working effectively (only if the external audit opinion was qualified) o Investigative audit – focuses on unusual or suspicious activity of an individual or in a department; determines the extent of loss and weaknesses in control o IT (Information Technology) audit – evaluates the company’s automated information processing systems to ensure that security and backup systems are in place and that data remains reliable. o Management audit (Performance audit) – to review business strategies and organisational structures to ensure efficient operations. OUDITVERSLAE Basiese begrippe en ander inligting ▪ Opgestel deur ONAFHANKLIKE/eksterne ouditeure, wat NIE deur die maatskappy indiens geneem is nie. ▪ Dis deel van die Gepubliseerde Fin. State van maatskappye; ALLE gebruikers kan dit lees, bv. aandeelhouers, werknemers, ens. ▪ Ouditeure reik ‘n MENING oor die gepubliseerde fin. state uit. Hierdie mening BEHOORT aan die lesers/ gebruikers van die state aan te dui dat die finansiële inligting betroubaar en geloofwaardig is. ▪ Eksterne ouditeure baseer hul mening op hul eksterne oudit nadat die inligting se akkuraatheid en egtheid nagegaan is deur steekproefneming van ouditinligting. (Interne ouditeure stel die finansiële state op en lê dit voor aan die eksterne ouditeure.) ▪ DRIE eksterne ouditmenings gebasseer op die betroubaarheid/geloofwaardigheid van die finansiële state: o Ongekwalifiseerd = ‘n ‘skoon’ oudit; daar was geen probleemareas of uitdagings gevind nie; state is dus geloofwaardig en aandeelhouers/alle gebruikers kan die finansiële resultate glo. o Gekwalifiseerd = probleemareas is geïdentifiseer en die state is minder geloofwaardig. Direkteure sal ‘n geleentheid kry om hierdie probleme reg te stel en/of veranderinge aan te bring. o Weerhouding van mening = Ouditeure is nie bereid om ‘n mening te gee nie, omdat daar nie bruikbare finansiële boekhoudingstelsels bestaan nie en/of ouditbewyse nie verkry kon word om 'n oudit te kan voltooi nie. ▪ Ouditbewyse kan uit die volgende bestaan: o Data of inligting, fisies of nie-fisies, bv. finansiële state; rekeningkundige inligting; bankrekeninge; bankstate; vaste bateregisters; betaalstate (payrolls); fakture en ander ondersteunende dokumentasie. o Dit kan in audio en/of video-formaat beskikbaar wees en selfs verbale antwoorde van kern-amptenare is aanvaarbaar ▪ Prosedures/Metodes om ouditbewyse te versamel (verkry): o Oudit-navraag (vra spesifieke vrae) o Oudit-waarnemings (bv. ouditeur neem waar hoe interne beheermaatreëls toegepas word of voorraad fisies getel word). o Oudit-inspeksies (bv.vergelyk die bateregister met die fisiese bate items in die besigheid) o Ouditprosedure (ontleed data in die fin. state volgends IFVS/IFRS-standaarde) o Herberekening (bv. sommige waardevermindering-uitgawes kan weer bereken word) o Her-uitvoering (bv. ouditeure stel hul eie bankversoenings op en vergelyk dit met dié wat opgestel was) ▪ Basis (Metodes) vir die versameling/verkryging van ouditsteekproewe: Eksterne ouditeure kan nie alle transaksies/inligting nagaan nie en neem dus net gedeeltes (steekproewe) daaruit. Hierdie steekproewe moet versigtig/regverdig gekies word op die volgende metodes: o Statisties, bv. ‘n persentasie van die totaal of net die gemiddelde aantal transaksies, ens.) o Nie-statisties: - Item-waardes, bv. die top tien hoogste waardes. - Items meer as 'n sekere bedrag of waarde, bv. items meer as R200 000. - Items wat spesifieke inligting bevat, bv. alle aankooptransaksies van ABC Bpk. - Willekeurige keuse - daar is geen spesifieke 'reël' vir die keuse van items. - Sistematiese keuse, bv. elke 10de betaling van elke maand, ens. - Lukrake keuse - keuse is sonder vooroordeel; enige item(s) wat verteenwoordigend is, kan gekies word. - Blokkeuse, waar steekproewe uit soortgelyke items geneem word, bv. enige 20 V/T tjeks. - Monetêre eenheid, bv. alle US-dollar transaksies. ▪ Soorte Interne ouditverslae: o Bedryfsoudit – evalueer die prestasie van 'n spesifieke afdeling/department in die onderneming. o Voldoeningsoudit – evalueer die mate waartoe die besigheid aan wetgewing/regulasies/beleid voldoen. o Finansiële oudit – evalueer finansiële data van 'n afdeling om te verseker dat dié afdeling se finansiële aktiwiteite volledig, akkuraat en geloofwaardig is en as sodanig in die maatskappy se fin. state getoon word. o Opvolgoudit – word ± ses maande na die eksterna oudit se opinie gelewer is, gedoen om te evalueer of korrektiewe stappe geneem is en effektief werk (slegs uitgevoer indien daar 'n gekwalifiseerde eksterne oudit was) o Ondersoekende oudit – fokus op buitengewone of verdagte aktiwiteite of individu in 'n department/afdeling; dit bepaal die omvang van verlies of swakplekke in die kontroles o IT-(Inligtingstegnologie)oudit – evalueer die maatskappy se geoutomatiseerde inligtingsprosedures en stelsels om te verseker dat sekuriteite en rugsteun (backup) in plek is en data betroubaar bly. Bestuursoudit (Prestasie-oudit) – om besigheidstrategieë en organisasiestrukture te hersien om doeltreffende bedryfsaktiwiteite te verseker.
"The Language of Business: How Accounting Tells Your Story" "A Comprehensive Guide to Understanding, Interpreting, and Leveraging Financial Statements for Personal and Professional Success"