Presentation 1 for Open Educational Resources
- 1. Auditing Fundamentals II For 2ND Level Open Educational Resources for Auditing
- 2. Auditing Outcomes: • To understand the definition of audit, • Types of auditing, • The principles of auditing, • The benefits and • Disadvantages of auditing. Open Educational Resources for Auditing - Outcomes
- 3. What is Auditing? Open Educational Resources for Auditing - Definition Auditing is the process of assessment and ascertaining of financial, operational, and strategic goals and processes in organizations to determine whether they are in compliance with the stated principles in addition to them being in conformity with organizational and more importantly, regulatory requirements.
- 4. Types of Auditing: • Internal Auditing - the audits done by employees and stakeholders within the organizations with a view to evaluate and assess whether the organization is following the internal processes, norms, rules, and regulations. • External Auditing - are done by independent and third party agencies and companies that are especially tasked with assessing and evaluating an organizations’ compliance with the regulatory norms. Open Educational Resources for Auditing - Types
- 5. • Financial Auditing - are the most common form of audits for various reasons including the fact that businesses exist to make money and return profits and generate wealth for their shareholders. • Strategic, Operational and IT Auditing - IT infrastructure and the fast paced external marketplace which needs an evaluation of whether the organizations are aligning their internal processes and strategies with that of the external strategic drivers and imperatives. IT audits are being sought to assess and evaluate the readiness of the organizations’ IT infrastructure and systems and IT processes to meet the stated goals and objectives in addition to being able to withstand IT risks and security breaches Open Educational Resources for Auditing – Types Continues…
- 6. Principles of auditing • Integrity, Independence and Objectivity - the auditor has to be honest while auditing, he cannot be favouring the organization. • Confidentiality - the auditor has access to a lot of sensitive financial information of the organization. • Skill & Competence - the auditor must be experienced and trained in the procedures of auditing. • Documentation - in most cases the auditor maintains an audit notebook, an audit plan and auditing file. • Planning - An audit plan allows the auditor t plan out his work and enables him to be more efficient and timely. • Audit Evidence - the auditor must collect enough evidence to support his final opinion. • Audit Conclusions and Reporting - after the auditor collects all evidence he must now form his opinion on the basis of the following criteria, all relevant accounting standards were applied at all times Open Educational Resources for Auditing - Principles
- 7. Auditing benefits • Assurance to the Owners One of the biggest advantages of auditing is that it offers assurances to the owners, investors, shareholders. • Errors and Frauds An error is something that is done without the intention to fraud the company, it is an innocent mistake. Fraud, on the other hand, is deliberate. • Independency If the auditor is an external auditor, the business can get a second opinion on their financial statements and their financial standing as well. Open Educational Resources for Auditing – Benefits & Disadvantages Auditing disadvantages • Cost Factor A very thorough and detailed audit would be a costly affair. • Time Factor Auditors generally work on a very specific timeline. • Inconclusive Evidence Generally, the audit evidence the auditor collects is persuasive in nature, not conclusive in nature