Talk:Audit/Archives/2013

Needs proofreading

This article has some awkward and ungrammatical sentences which could use some cleaning up which I hesitate to do as I am not an accounting professional.

E.G: "They provide functional operation to the concern.Though Internal Auditors are the employees of the company so that they can easily find out the frauds and any mishappening."

I think I know what this means but am not entirely sure. "functional operation to the concern" seems like jargon. How about "Internal auditors are responsible for routine investigations into the operation of the organisation that employs them" as a replacement. The use of "Though" is redundant and "mishappening" might better be replaced by "anomaly" or "discrepancy" but am not sure which. The word compony should be company. Could an accountant this up please ? Copsewood 18:40, 16 March 2007 (UTC)

Another example: `Why are Auditors needed`` in the See Also section. 66.37.246.163 15:17, 22 August 2007 (UTC)

New information

The article was accidentally blanked and User:Litonc worked on it from scratch. I have restored the old version, but Litonc's info is below, in case someone wants to incorporate it:

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Audit has been seen as a broad area over the years. But it has some fundamental concepts, after understanding which one should be able to get the whole picture of Audit. Audit is a one word that is important and is used all around the world in the business terms.

Audit came from Latin word which means "To Hear". In today's world, it is known as inspection of Financial Statements to confirm that they are free from Media:Material Misstatement and to give opinion (to the shareholders; not to the management or board of directors) about whether the financial statements conform with the Accounting Standards.

Audit can be divided into two categories. They are: 1. Internal Audit 2. External Audit

Overview of Internal Audit: Internal Audit is defined as the audit which is performed to investigate the internal controls of the organization. It can be performed by the Internal Audit Department or any audit firm which is hired to perform internal audit (Outsourcing Internal Audit) of that particular company. Internal Audit is not compulsory for any company but performed when there is a need perceived by the management of a company. Controls in an organization are of two types: a) Accounting Controls; and b) Administrative Controls.

• • Example of Accounting Controls and Administrative Controls: If you go to the Supermarket, you would see the Cash Receipt counter on which all the counting of products and money is done. This is accomplished because the accounting control is there. Cashier keys in the product code and the amount of the product appears on the screen and eventually a customer pays for it.

If you see that the price of the product is not the same as it is supposed to be, you might consider it Bad Accounting Control.

• • Now Assume that an employee of that organization shows antipathy to serve any service to you, and consequently you go to complain to the people who are in the Information/Complaint center. This time, you can see whether administrative control is appropriate and sufficient or not.

If they don't bother about your problem and no action is taken, you might say that the Administrative Control has not properly been established.

INTERNAL CONTROL can be divided into two folds: 1. Internal Control Environment, 2. Control Procedures.

TO BE CONTINUED

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--Commander Keane 01:06, 29 March 2006 (UTC)

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I will work to incorporate User:Litonc's content within the next few days -Regards, Smorter 06:40, 18 June 2006 (UTC)

I made a number of edits to both Audit and Types of Auditors. I believed that having to cut down on the paragraphs allow a more comprehensive definitionn of the terms.

As for Internal Control, based on actual practice, there are 2 aspects: Accounting controls and Administrative controls. Auditors are concerned more on the former.

From the above, dividing Internal Control into its environment and procedures is actually only a sub-classification, because an assessment of the internal control environment provides a general overview of a company's system, while the procedures are the specific steps implemented by the company to safeguard its assets and protect them from theft, among others. Its one and the same thing.

To properly make a distinction, we have to list down what are the two categories of Internal Control, being:

1. Accounting controls;

2. Administrative controls.

Modelwatcher 15:27, 21 November 2006 (UTC)

Audit definition

Some unregistered users keep on altering the definition of Audit. Please refrain from doing so. There is a need to provide a comprehensive definition of the term, as it is not fully understood by people outside the Accounting profession.

Many of the workings of an audit need to be explained, and as such, a more detailed definition is required. For instance:

1. An audit is based on random sampling and that complete examination of a company's books or records are not being done. That is basically the premise behind the use of the term 'fairly presented', which means that the examination conducted by auditors is based on a given set of limitations.

2. System of internal control, aside from determining the absence of errors/mistakes and fraud, the auditor is tasked to make an assessment of a company's system of controls to safeguard its assets and protect them from theft, as well as, procedures used to provide the proper use of its resources and how its personnel conduct itself.

These are just 2 important concepts that need to be emphasized.

For a definition to be meaningful and comprehensive, it should be constructed, at least, by an experienced auditor or accountant, with the exposure to actual accounting/audit practice. Kindly refrain (again) from deleting portions of the definition.

--Modelwatcher 06:19, 26 December 2006 (UTC)

AUDIT N PRACTICE

Audit is one of the most practical oriented subject, having the direct application on the assignment

What is auditing

Audit is a formal activity which is carried out against mutually agreed scope of the audit (policies,procedures or other regulatory requirments) to independently examine if the auditee (person, department, organization etc) meets the requirement. It is not neccessary that it should be only financial audits, audits can be performed on any section, area. 3 categoroes of audit: 1) Internal Audit (audit by own department or organization, however should not be self audit means I do my own audit, should be a third eye) 2) 2nd Party audit (Audit performed by customers on suppliers) 3) 3rd party audit (Audit carried out by external parties to your department or organization) —Preceding unsigned comment added by 207.229.32.99 (talk) 16:06, 21 March 2008 (UTC)

Quality Audit Copyvio?

The section on Quality Audits that I just tagged as a possible copyright violation appears to have been added by an account with no other contributions. 70.227.232.162 (talk) 20:00, 26 March 2008 (UTC)

history

Could do with a LOT more history and its significances through out history. —Preceding unsigned comment added by 212.201.78.19 (talk) 19:32, 13 January 2011 (UTC)

The piece requires a history section. Eg it does not tell us when external financial audits became mandatory for different types of companies. FreeFlow99 (talk) 15:10, 24 May 2012 (UTC)

the purpose of auditing?

The purpose of auditing seems to be implicit in there, but it should be explicitly stated for those of us, who not even knowing what auditing is, come to this site to find out. Anyway, according to the definition used: what EXACTLY is auditing. If someone write up a quick one or two sentences as to its purpose (i.e. i dunno - e.g. to satisfy investors  - or whatever, please do so). --ToyotaPanasonic 07:06, 31 March 2007 (UTC)

"The purpose of an audit is (a) to satisfy any legal requirement to conduct an audit, and/or (b) to give a measure of confidence, or otherwise, to any person(s) who may wish, or need, to rely on the information given in the original accounts/financial data being audited." --217.205.245.158 20:38, 8 May 2007 (UTC)

The purpose of auditing is to provide assurance that a company's financial records are prepared and presented correctly in a manner that follows internationally accepted standards. In other words, an audit allows a company to declare that what's being reported as their financial status is correct. Modelwatcher (talk) 19:14, 7 January 2008 (UTC)

The purpose of auditing is to clarify or assure the financial statements or information of an entity that are prepared in all material respect in accordance with financial reporting framework, to be able useful in decision making process. --Lvictorio —Preceding unsigned comment added by 180.193.29.199 (talk) 02:24, 24 November 2010 (UTC)