Monday, December 22, 2008


The overall objective of a financial statement audit is the expressions of an opinion on whether the client’s financial statement are presented fairly, in all material respect, in conformity with GAAP. The diagnostic process of making judgments about the accounts likely to contain material misstatement and obtaining reasonable assurance about fair presentation in the financial statements involves six distinct phrases.
1. Perform risk assessment procedures.
2. Assess the risk of material misstatement.
3. Respond to assessed risks.
4. Perform further audit procedures.
5. Evaluate audit evidence.
6. Communicate audit findings.


Financial Statement Audit
A financial statement audit involves obtaining and evaluating evidence about an entity’s presentation of its financial position, result of operation, and cash flows for the purpose of expressing an opinion on whether they are presented fairly in conformity with established criteria-usually generally accepted accounting principles (GAAP).

Compliance Audit
A compliance audit involves obtaining and evaluating evidence to determine whether certain financial or operating activities of an entity conform to specified conditions, rules, or regulations

Operational Audit
An operational audit involves obtaining and evaluating evidence about the efficiency and effectiveness of an entity’s operating activities in relation to specified objectives.

Saturday, December 20, 2008


1. Independent Auditors
Independent auditors are usually CPA’s who are either individual practitioners or members of public accounting firms who render professional auditing services to clients. In general, licensing involves passing the uniform CPA examination and obtaining practical experience in auditing.
2. Internal Auditors
Internal auditors are employees of the organization they audit. This type of auditors is involved in an independent evaluation of evidence, called internal auditing, within an organization as a service to the organization. The objectives of internal auditing is to assist the management of organization in the effective discharge of its responsibilities.
3. Government Auditors
Government auditors are employed by various local local, state, and federal governmental agencies. At the federal level, the three primary agencies are are the General Accounting Offices (GAO), the Internal Revenue Services (IRS), and the Defense Contract Audit Agency )(DCAA).