Auditing Exam 1 Review
Nature of Auditing:
* Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence b/w the information and established criteria. * Auditing should be done by a competent, independent person. Information and Established Criteria:
* To do an audit, there must be information in a verifiable form and some standards (criteria) by which the auditor can evaluate the information. Accumulating Evidence and Evaluating Evidence:
* Evidence is any information used by the auditor to determine whether the information being audited is stated in accordance with the established criteria. Competent, Independent Person:
* The auditor must be qualified to understand the criteria used and must be competent to know the types and amount of evidence to accumulate to reach the proper conclusion after the evidence has been examined. * The competence of the individual performing the audit is of little value if he or she is biased in the accumulation and evaluation of evidence. Reporting:
* The final stage in the auditing process is preparing the Audit Report, which is the communication of the auditor’s findings to users.
Distinguish b/t auditing and accounting:
* Accounting is the recording, classifying, and summarizing of economic events for the purpose of providing financial information used in decision making. * Auditing is determining whether recorded information properly reflects the economic events that occurred during the accounting period.
Economic Demand for Auditing:
* Information risk reflects the possibility that the information upon which the business risk decision was made was inaccurate. * Auditing can have a significant effect on information risk. Causes of Information Risk:
* Remoteness of information: 信息的间接性
When information is obtained from others, the likelihood of it being intentionally or unintentionally misstated...
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