WHAT IS AUDIT

 An audit is a systematic process of examining

and evaluating evidence to determine whether
an organization's systems, processes, and
controls are effective and in compliance with
established standards or criteria.

 Audits can be conducted internally by

employees of the organization or externally by
an independent third-party firm.
 T YPES OF AUDIT
 Internal audit: An internal audit is an audit that is conducted by an organization's
own employees. The purpose of an internal audit is to provide assurance to
management and the board of directors that the organization's systems and controls
are effective and that the organization is complying with applicable laws and
regulations.
 External audit: An external audit is an audit that is conducted by an independent
third-party firm. The purpose of an external audit is to provide assurance to
stakeholders, such as investors, lenders, and customers, that the organization's
financial statements are fairly presented and that the organization is complying with
applicable laws and regulations.
 Forensic audit: A forensic audit is an audit that is conducted for the purpose of
investigating financial irregularities or fraud.
CORRECTIVE AND
PREVENTIVE ACTIONS Click icon to add picture

OF AUDITS (CAPA)
Corrective actions are taken to address the immediate root cause of a non-
conformity.
For example, if an audit finds that a company's financial statements are not in
compliance with GAAP, the company would need to take corrective actions to
correct the errors in the financial statements.

Preventive actions are taken to reduce the risk of a non-conformity from

occurring in the future.
For example, if an audit finds that a company’s quality control procedures are
not effective, the company would need to take preventive actions to improve its
quality control procedures.
TENDERS AND CONTRACT OF AN
AUDIT
 Tenders and contracts for audit services are typically used by
organizations to select and engage an independent auditor to perform an
audit of the organization's financial statements or other aspects of its
operations.

 Tenders are a formal process by which organizations invite potential

auditors to submit bids for the audit services. The tender process
typically involves the organization issuing a request for proposals (RFP)
to interested auditors. The RFP will outline the scope of the audit, the
required qualifications of the auditor, and the evaluation criteria that will
be used to select the winning bid.

 Contracts are legal agreements between the organization and the selected
auditor. The contract will specify the scope of the audit, the fees to be
paid to the auditor, and the timeline for completion of the audit.
KEY ELEMENTS OF
AUDITS
 The key elements of audits are:
 Objectivity: Auditors must be objective and independent in their work. This means that they must not have any
financial or personal interest in the organization that they are auditing.
 Risk-based approach: Auditors should use a risk-based approach to their audit work. This means that they should
focus their audit efforts on the areas where there is the highest risk of material misstatement.
 Materiality: Auditors must consider the materiality of potential misstatements when determining their audit
procedures and reporting their findings. A misstatement is considered material if it is likely to influence the
decisions of reasonable users of the financial statements.
 Audit documentation: Auditors must prepare and maintain adequate audit documentation to support their findings
and conclusions. The audit documentation should be sufficient to enable another auditor to understand the audit
work that was performed and the conclusions that were reached.
 CONCLUSION

 The conclusion of an audit is a formal statement where the

auditor provides an opinion on the accuracy and fairness of
the financial statements.

 This opinion can be unqualified (indicating the statements are

accurate), qualified (indicating some issues), adverse
(indicating significant issues), or a disclaimer (indicating a
lack of opinion).
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