Audit and Assurance

Definition An audit engagement letter or EL is a written agreement required by auditing standards that signifies the business relationship between two parties. These two parties are the auditor and the client. This letter must be signed before the start of all audit engagements. In the letter, the parties will set out their expectations so […]

The entity engages auditors to review the entity’s financial statements based on a scope agreed with the entity’s management. The auditors have many rights and duties due to the level of assurance they are providing and the performance of an external audit. We will be discussing these rights and duties in detail in this article.

An assurance engagement is a type of project carried out by accounting professionals. It will usually end with a report being issued. The report contains the professionals’ opinions on a subject matter based on a certain set of criteria. This opinion enables the users to read the report with confidence and base their own decisions

The Audit of Financial Statements is one of the most critical factors during the ordinary course of business. This is primarily because it helps the financial statement users get reasonable assurance that financial statements have been prepared accurately. The main objective of a financial audit is to ensure that all the respective checks have been

What is a Walkthrough Test? A walk-through test is an audit procedure used by an auditor during an auditing process to gauge the reliability of the accounting system used in the company. Walk-through Test helps trace transactions within the company to trace all the relevant double entries completed from the initial part of the transaction

What are Material Misstatements? Material Misstatements can be defined as inconsistencies in the accounting system, which are significant enough to influence the decision-making ability of the user of the financial statements. Material Misstatements imply that the financial figures that have been disclosed in the financial statement, including the income statement (or the balance sheet), are

Controls protect an entity’s assets against fraud or severe loss, preserve the integrity of financial data and transactions and assure financial, accounting, and regulatory compliance when properly designed and implemented. Having adequate controls in place is just half the fight; after these controls are in place, an entity must have policies and processes in place

Controls are required for entities and organizations to protect assets and mitigate risks. These are very important because they determine the efficiency and efficacy of the entity’s operations. Furthermore, internal controls play an important role in an entity’s financial reporting processes. Therefore, controls are put in place by most entities with the expectation that they

What is accounting? Accounting can be defined as the task of tracking, reporting, and subsequently analyzing financial transactions. It covers areas ranging from financial reporting to the preparation of tax returns to be filed annually. Accounting is basically a tool that helps to analyze the company’s profitability after drawing a comparison of the sales revenue

Definition of Vouching Vouching is a procedure that auditors use to authorize the credibility of the entries allowed in the books of accounts. In other words, it is the documentation that helps the auditors to check the authentication and the accuracy of the documents that the client has presented. During the audit process, the auditors