related to audit theory

Topics: Auditing, Audit, Internal control Pages: 18 (6410 words) Published: March 4, 2014
The term statutory audit refers to the review or the record of the company of the government organization which is required by the law or the municipal authority of any particular region. This is done to monitor the performance of the firm or the government organization. The company here the auditors who provide the auditing report and submit those reports annually or semiannually to the law or the concerned municipal law authority. This statutory auditing finally does the cross checking of the financial reports which are provided by the companies. They do cross checking by gathering the transaction information from the company’s bank and also from other various sources. This statutory auditing is done for the government own companies. The law firm responsible for making this statutory auditing requires all the municipalities which are performed by that government organization. The authority examines all the financial transactions and account balances which contributes in making the final report by the statutory auditing information. Generally these are prepared for the general public. They show how the tax collection is spent and on what things they have invested along with the amount of the investment done on each project or program. These reports will help everyone to know the overall performance of the government and nothings become under the veil. The report is prepared by various methods, almost every law authority who prepare a statutory report opts some different ways. When preparing the annual statutory auditing report, here the GAAP (Generally Accepted Accounting Principles) are not followed. The entire scope and the performance of the government organization is explained under this report. The statutory auditors become elected when the board of directors vote them, those auditor before being elected to this job must have some top position in the hierarchy level of that government organization

Internal Audit-
Internal audit is an audit initiated by the management of a organisation to ensure the working of internal control procedures, the reliability of financial and management reporting and compliance with laws and regulations. The scope of internal audit is decided by the management of a organisation.

Though the scope of internal audit is limited as compared to external audit, still is very important to the proper functioning of the organisation . Internal audit serves as a precautionary step to detect and fix any abnormalities in the internal functioning of the organisation before the external auditor arrives. Internal Audit Report Guidlines

Before writing the report, internal auditor must think about the users of internal audit report. The report should be such that the user is easily able to understand it. If the report is to be read by the top management then it should have an in depth analysis, while a report aimed at middle or lower management should focus on simple and easy language to convey the information in an efficient manner. Contrary to point 1 discussed above, a report should always look professional, irrespective users. Use of graphs and different fonts achieves this objective. Using bold and italicised fonts to highlight important information is a must. An audit report should always contain a brief summary so as to enable its users to have a quick overview of the problems and their solutions. Before writing the report and auditor should analyse any concerns or problems in detail. This helps in setting a pivot point around which the entire report should be written. An effective internal audit report should be able to convince the users of the findings specified in the report. Hence it is very important to specify the scope of audit, mode of conducting it ,sources of information and the extent of sampling done (if any). A good internal audit report must always finish with a conclusion and all the concerns should be duly addressed. Internal Audit Report Format

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