The Audit Process

Essay by viciousvik January 2008

download word file, 2 pages 2.3

Downloaded 54 times

Definition:An independent and objective assurance designed to improve an organisation by bringing a systematic and disciplined approach to evaluate and improve management and control.

Objectives:Independent Review and Appraisal.

Provide reassurance to management that agreed working practises are carried out efficiently.

Review value for money processes, systems within company policy.

Identify fraud in order to deter crime.

Ascertain extent of compliance with procedures,policies, regulations and legislation.

Recommend improvements in control, performance and productivity.

The auditor begins by establishing and understanding of the current system functions. This can be achieved by procedure manuals and examples of documentation. Auditing is done through a series of steps which improve the individuals ability to achieve his/her levels of awareness.

To document and evaluate the current system accurately to see if it meets the needs of the company and to establish a check list of questions; For example as follows:-.

Can goods be purchased without authority?Can liabilities be incurred if goods have not been received?Are purchase requisitions tied to their associated orders?Principles:Throughout this period of auditing the following principles need to be applied in order to maintain an effective and concise audit.

Accountability:auditors act in the interest of the company on behalf of the management / directors.

Integrity: to act with integrity and to fulfill their responsibilities with honesty, fairness and truthfulness.

Objectivity: auditors express opinions independently and are there to purely ensure that company practises are actively maintained.

Association: auditors will only allow their reports to be included with other documents if they do not contain conflicting information which could mislead the final analysis.

It should be noted that over-familiarity can arise where an auditor is confined to a project for a lengthy period of time. Therefore it is important to maintain your independence at all times which in turn will not compromise your report...