Enobal, Ma. Eloisa Rubio, Rose Mae Rubio Tanieca, Carla Theresa BSA41 Case 1 Types of Audits 1.

. Different auditors do the audits of your company because each type of auditor has a specific purpose and it wouldnt be reliable if one does all the audits. External auditors are those that are independent from the organization, theyre not an employee of the company, thus can give a reliable opinion with regards to the assertion being made. External auditors perform mainly financial statement audits. An internal auditor is one that is an employee of the company he/she audits but still independent though not in the same sense as an external auditor. Internal auditors mainly perform operational and compliance audits. A government auditor would not be necessary for your company because it involves auditing government funds and other government related activities, and your company is not a government agency. 2. There would be a possibility of bias in presentation and auditing the statements of the company if the internal auditor did it all. Although the internal auditor is supposed to still be independent, it wouldnt be the same as an external auditor since the internal auditor is an employee of the company. A conflict of interest may also exist between management and the information users. A conflict of interest and possible bias may result in statements not being fairly stated and thus making decisions less effective.

Case 2 Misconceptions About Auditing and Accounting 1. We are also professionals as Certified Public Accountants. There is a scientific approach to the audit process; there is what we call an audit plan. As stated in the definition, Auditing is a systematic process An auditors work is not mainly to lookout for fraud. An auditor obtains and evaluates evidence on the

assertion being made and prepares an audit report with an opinion about the assertion made. Auditors also look out for efficiency and effectiveness of a companys performance, as well as compliance with related laws and regulations. Without our professional assurance and judgment, intended users might not be that confident in making decisions with regards to a companys financial statements or other information that needs to be audited. 2. Accounting and auditing is not merely about math, it is more on critical thinking. Only simple math operations are used. Accounting and auditing is more on comprehension and analysis. Comprehension because you need to understand the principles and rules on accounting and be able to apply these. Analysis because you need to analyze transactions or situations and be able to use your professional judgment in making decisions. Writing can also be a skill that an accountant may need, because there are a lot of reports that one does. 3. As class valedictorian, I chose the right profession and the way I serve the public. We, auditors, assure that our clients are complying with the laws and assure that their financial statements are fairly stated for the benefit of its stakeholders such as the general public. Without us auditors, a companys stakeholders or interested users wouldnt be able to make reliable or effective decisions if the information they would get is not assured of being fairly stated. And as auditors, we dont just simply check what someone else has done; we analyze carefully to be able to make an assurance that is reliable and credible.