Thursday, July 9, 2020

Auditing - Concept

Auditing

Management concepts knol Series

The management concept knols will have introduction to the concept, definition and brief explanation, links to various knols on the concept, books on the concept and research papers on the concept. Visitors are requested to add the research papers they are aware of and contribute to developing a good bibliography of research papers on the concept.

Concept Definition and Explanation




An audit of historical financial statements has been defined as a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria, and communicating the results to interested parties. It is a form of attestation service in which the auditor issues a written report expressing an opinion about whether the financial statements are in material conformity with generally accepted accounting principles or other recognized criteria. The fundamental aspects of the objectives of financial statements in the context of providing the users with sincere financial information about the entity, and consequently the audit of such statements, remain unchanged in spite of the significant changes that have taken place in the business environment and financial markets.

(Soltani)

 
Auditing is analytical, not constructive; it is critical, investigative, concerned with the basis for accounting measurements and assertions. Auditing emphasizes proof, the support for financial statements and data. Thus auditing has its principal roots, not in accounting, which it reviews, but in logic, on which it leans heavily for ideas and methods.
 (Mautz and Sharf, 1961: 14)

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