AUDITING

• Auditing - it is a systematic process based on ordered & structured series of steps. Obtaining and evaluating evidence about assertions regarding economic actions and events.
• Assertions - representations made by the auditee about economic actions and events.
• Criteria - comparing the statements with an identified financial reporting framework.
• Types of Financial Reporting Framework

  • Philippine Financial Reporting Standards (PFRS)
  • PFRS for Small and Medium Entities
  • International Accounting Standards Board (IASB)
• Types of Audit

  • Financial Statement Audit
  • Compliance Audit
  • Operational Audit
• Types of Auditors

  • External Auditors
  • Internal Auditors
  • Government Auditors
• External Auditors - CPAs who offer professional service on a contractual basis who generally perform financial statement audits.
• Internal Auditors - entity’s own employees who investigate and appraise the effectiveness and efficiency of operations and internal controls.
• Government Auditors - Determine whether persons or entities comply with government laws and regulations.
• Responsibility for the Financial Statements

  • Chairman of the Board
  • Chief Executive Officer
  • Chief Finance Officer
• Philippine Standards on Auditing (PSA) - is designed only to provide reasonable assurance (not absolute assurance) that the financial statement taken as a whole are free from material misstatements.
• Audit evidence is generally persuasive rather than conclusive in nature.
• The auditor should plan and perform the audit with an attitude of Professional Skepticism.