What is audit

What Is Audit?An Exceptional Detail about an auditing!!!!

Definition Of Audit:

an official inspection of an organization's accounts, typically by an independent body.

"audits can't be expected to detect every fraud"

Use of Auditing Standards in Business World:

Generally Accepted Auditing Standards, or GAAS are sets of standards against which the quality of audits are

performed and may be judged. Several organizations have developed such sets of principles, which vary by territory. In

the United States, the standards are promulgated by the Auditing Standards Board, a division of the 

American Institute of Certified Public Accountants (AICPA).

• General• The auditor must maintain independence in mental attitude in all matters related to the audit.• The auditor must have adequate technical training & proficiency to perform the audit.• The auditor must exercise due professional care during the performance of the audit and the

preparation of the report.• Standards of Field Work• The auditor must adequately plan the work and must properly supervise any assistants.• The auditor must obtain a sufficient understanding of the entity and its environment, including

its internal control, to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures.

• The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the financial statements under audit.

• The auditor must assign qualified personnel to the engagement.

• Standards of Reporting• The auditor must state in the auditor's report whether the financial statements are presented in accordance with

generally accepted accounting principles.• The auditor must identify in the auditor's report those circumstances in which such principles have not been

consistently observed in the current period in relation to the preceding period.• When the auditor determines that informative disclosures are not reasonably adequate, the auditor must so state

in the auditor's report.• The auditor must either express an opinion regarding the financial statements, taken as a whole, or state that an

opinion cannot be expressed, in the auditor's report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor's report. In all cases where an auditor's name is associated with financial statements, the auditor should clearly indicate the character of the auditor's work, if any, and the degree of responsibility the auditor is taking, in the auditor's report.

• Clarity Project• In 2004, a project was begun to clarify and converge the standards with the International Standards in Auditing

(ISAs). Many of the AU sections are being remapped as part of the Clarity Project.[5] In October 2011, SAS 122 was issued which superseded all previous SASes except 51, 59, 65, 87, and 117-20.[6] In the interim period, these new AU sections are referred to as AU-C until 2014.[6] The AICPA provides a list of the AU-C standards.

10 generally accepted auditing standards

• Auditing Standards • .02 The general, field work, and reporting standards (the 10 standards) approved and adopted by the

membership of the AICPA, as amended by the AICPA Auditing Standards Board (ASB), are as follows: General Standards

• 1. The auditor must have adequate technical training and proficiency to perform the audit. • 2. The auditor must maintain independence in mental attitude in all matters relating to the audit. • 3. The auditor must exercise due professional care in the performance of the audit and the preparation of the

report. Standards of Field Work• 1. The auditor must adequately plan the work and must properly supervise any assistants.• 2. The auditor must obtain a sufficient understanding of the entity and its environment, including its internal

control, to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures.

• 3. The auditor must obtain sufficient appropriate1 audit evidence by performing audit procedures to afford a reasonable basis for an opinion

Graphical Presentation:Top 20 Accounting Firms in The World

1. DeloitteIt comes as no surprise that Deloitte holds the number one global position. It’s hold on the top spot seems secure for the time being.Deloitte is located in more than 150 countries, and has over 600 offices in the world. The firm is headquartered in New York City, New York. They have most recently reached the 100-partner milestone when they merged with Curtis Mclean.

2. PwCDeloitte’s closest competition over the last few years has and continues to be PwC (PricewaterhouseCoopers). PwC comes in as the second largest accounting firm in the world.PwC has locations in more than 150 countries and more than 750 offices worldwide. Unlike Deloitte, they are headquartered in London.The firm has most recently merged with Booz & Co, a medium sized consulting firm. The merger was approved on December 23rd, 2013. They offer a wide range of services but they specialize in audit & assurance, tax, and consulting.

3. Ernst & YoungErnst & young earns the number three position in global accounting firms. This firm operates in more than 150 countries, utilizing more than 700 offices worldwide.

4. KPMGHolding firm at number four, KPMG comes in as the last of the big four, but still far ahead of the number five firm on our list.The firm operates in over 650 offices located in over 150 countries around the world. They are headquartered in Amsterdam, Netherlands.In recent news, the company has recently merged its Denmark operations with those of Ernst & Young. The merger will allow the company to offer more services to its clients while providing more support for that particular region.

Scope of ACCA in upcoming next 5 years

• WHAT IS THE BEST INSTITUTE FOR ACCA/CAT IN KARACHI?• In Karachi beyond any doubt CAMS is chosen the best institute by the voters. However, AL-Hamd institute is giving the

CAMS a very tough competition and is almost head to head with CAMS.• ACCA VS. CA• In Pakistan ACCA is second only to CA, and to be very frank students of ACCA were found very "noisy" over this. At every

point, at every opportunity CA keep its lead over ACCA. In order to put CAs to the test ACCA students have a new plan ACCA+MBA that really is AN idea. However some said that ACCA is a substitute to CA because of its global recognition and "easy to study" syllabus as compared to CA and in addition to that less time to complete the certification.

• N HOW MUCH TIME ONE CAN DO CAT?• Results reported that one can do CAT in 1 or at most 1.5 years max.• WHY STUDENTS CHOOSE ACCA?• Well, not like other qualifications, most of the students enter into this with proper plan and vision. But there is no less

than majority who choose ACCA who left with no options and not surprisingly some of the population started this because of his/her relatives were doing the same

• WHAT TO DO AFTER ACCA?• Vast majority answered that they will be doing CA (after claiming exemption up to CA-Inter i.e. module D) Or CFA.• .

Prepared By:

• MUHAMMAD ADIL NOORANI:• EMAIL: [email protected]

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