Types Of Audit

FINANCIAL STATEMENTS AUDIT

A financial statement audit is the examination of
an entity's financial statements and
accompanying disclosures by an independent
auditor.

OPERATIONAL AUDIT

An operational audit involves a systematic

review of an organizations activities, or a part
of them, with the objective of pointing out
improvements that will increase its efficiency
and effectiveness.

COMPLIANCE AUDIT

Testing and reporting on whether an organization

has complied with the requirements of various
laws, regulations and agreements

INTERNAL & EXTERNAL

AUDITING

ASPECTS OF EXTERNAL
AUDIT
Statutory
audit
It has always been the traditional role of an external auditor. It
covers all external audit activities, to ensure that the entity
complies with the appropriate fiscal requirements, accounting
standards, and other legislation governing the financial
records of the entity.
Management of audit activities
Management of an audit team or audit department at
senior, supervisory or management level is likely to
reinforce the quality and level of experience in other areas
of external audit.

ASPECTS OF EXTERNAL
AUDIT
Consultancy
The recent growth of consultancy work in audit firms has been an
important development, and there is usually an accounting
connotation to this work. Although auditors sometimes undertake such
work, there are many firms in which specialist consultancy
departments (or even separate consultancy firms) have been set up.

OBJECTIVES OF EXTERNAL
AUDITING

To identify and assess the risks of material misstatement of

financial statements due to fraud.
To obtain sufficient appropriate audit evidence regarding the
assessed risks of material misstatement due to fr aud, through
designing and implementing appropriate responses.
To respond appropriately to fraud or suspected fraud identified
during the audit.

Relationship Between
During the course of their planning, the external auditors should
perform a preliminary assessment of the internal audit function, when it
appears that certain internal audit work is relevant to their external
audit.
A favorable assessment might allow the external auditors to modify the
nature, timing and extent of external audit procedures

TASKS OF INTERNAL
AUDIT
To examine the risks that the organization
faces.
To review the adequacy of the controls in place
to protect it from those risks
To verify that the controls are working as
intended
To add value and improve the organizations
operations