Audit and Assurance

We may occasionally come across a section in the auditors’ report on the Other Matter when reading through an audit report especially that of a public listed company. The auditor uses the “Other Matter” section to draw the attention of the users of the financial statements to any matter or matters other than those already […]

Before we dive into what Reasonableness Test is in audit, we must first understand what analytical procedures are. The analytical procedures are essentially a method for an auditor to analyze the available financial or non-financial data and identify certain trends, patterns, or relationships. However, the results of such analysis are only useful when they are

Before we dive straight into sampling risk, let us first understand what audit sampling means. Audit sampling is essentially a performance of audit procedures on less than 100% of the total population. Sampling allows the auditor to test selected items that are representative of the total population so that he still can obtain sufficient and

Overview: Most of the businesses have distinct owners and management due to the lack of adequate knowledge and skillset required by the owners to run the corporation. As a result, they hire people with experience and knowledge to run their business. Yet, there are certain drawbacks to it as well. While owners hand over control of their company to management,

In practical business affairs, when an auditor conducts an audit of a company’s financial statements, they produce opinions centered around the facts reported. Auditors also have to report whether or not the information provided to the client was true, appropriate, and representing a just view of the company’s financial conditions. To produce these ideas, however,

Auditors’ audit techniques or methodologies to detect material misrepresentation in financial statements are known as substantive audit procedures. Auditors cannot rely on the client’s internal control system for some clients; hence, they apply solely substantive audit procedures. Similarly, auditors conduct substantive audit procedures to acquire substantive evidence concerning account balances, transaction classifications, and financial statement disclosures for

When auditors perform an audit, they do not check 100% of the transactions and balances. Instead, they will perform audit procedures on a sampling basis. The samples selected will be quantitatively or qualitatively material to the financial statements. Today, we will talk about a criterion that helps auditors determine whether a financial line item is

When we talk about audit firms, most of us think about external audits. External audits are annual audits carried out by external auditors for the clients to meet regulatory requirements. During the external audits, the auditors will gather evidence to determine if the financial statements are true and fair and free from material misstatements. However,

What is an Assurance Engagement? In business practices, assurance engagements are meant to execute the same task that their name expresses. It is an assurance meant to generate confidence in an individual about a theory generated by a consultant or practitioner. In simple words, it is used to assure an individual about an outcome generated

Did you know that there are two different types of assurance engagements? According to how much assurance the practitioners are giving, the two types of assurance engagements are reasonable and limited assurance engagements. We will discuss the two types of assurance engagements below. 1) Reasonable assurance engagements Reasonable assurance engagements are where the practitioners give