Internal Auditing (Auditing and Assurance Principles)

Internal Auditing (Auditing and Assurance Principles)

1. What is Auditing?
- Auditing is basically about the assessment and investigation of the subject matter
or the financial statement audits. It is mostly done by a practitioner or a third
party to lessen the biased conclusion among the reliability and credibility of the
information. It is also done to confirm if they are in compliance with the rules and
regulations of the Generally Accepted Accounting Principles (GAAP).
2. Differentiate the following:
1. Assurance Engagements
- It is rendered by an independent professional accountant who impart reliability
and credibility to the financial statements by a conclusion. It also increases the
confidence of the intended users of the subject matter on the practitioner’s
conclusion or outcome of the examination.
2. Assurance Services
- These are liberated examination done by practitioners within the entity’s process
and internal and external controls. Its aim is to provide a level of assurance to the
financial statements by lessening the risks, increase the reliability and credibility
of the content and putting them in a form that assists decision making.
3. Attestation Services
- These are services where a Certified Public Accountant (CPA) gives a report and
assurance as to the reliability, credibility and truthfulness of the subject matter or
the financial statements or the assertion of the former. One of the famous and
most intensive level of attestation is said to be the examination of historical
subject or the financial audit (Shelton Hal).
4. Audit Engagements
- Audit engagement can be said to be a consultation or an arrangement of the
entity or business owner to the practitioner or auditor to perform audit to its
subject matter of financial statements and records. The said individuals will meet
up and discuss the services needed by the consultee. The details such as the
agreed services, price and duration of performing the audit are stated in an
engagement letter done by the consultant then sent to the client.
5. Financial Statements Audit
- It is the investigation of the subject matter or financial statements of the company
to add credibility and reliability to the reports of the business. It is done by an
independent or external auditor and attest the fairness of the reports and
associated disclosures. His audited report must also be attached besides the
financial statements when they given to the intentional users of information.
3. Why do we perform Financial Statements Audit? What is its importance and
for whom do we perform such?

- We do financial statements audit in order to add credibility, reliability and
truthfulness to the subject matter of an entity and its performance. It is also to
ensure that it is complying with the rules and regulations of different accounting
standard and financial frameworks. It can also help to maintain definite and
timely data collection. We must perform this to all business owners or entities
whom expecting prospect investors through the use of their credible subject
matter.
4. Who can perform a financial statements audit?
- Only Certified Public Accountants with accreditation from the Securities and
Exchange Commission (SEC) and Board of Accountancy (BOA) are allowed to
conduct auditing of financial statements.

Reference/s:
AccountingEDU Staff (2021). Retrieved August 3, 2021 from
https://www.accountingedu.org/accounting-vs-auditing/
Corporate Finance Institute Education Inc. (2015-2021). Retrieved August 03, 2021
from https://corporatefinanceinstitute.com/resources/knowledge/accounting/what-is-an-
audit/ https://corporatefinanceinstitute.com/resources/knowledge/accounting/assurance-
services/
Cabrera, M. & Cabrera G. (2020). Principles of Auditing and Assurancce Services(2020-
2021 ed.). GIC Enterprises & Co., Inc.
Laco, R., et.al. (2022). Quicknotes in Auditing Theory: For Accountancy Students and
CPA Reviewees (2020 ed.).
Hal, Shelton (2017). Attestation Services: The Tools That May Help You Avoid an Audit.
Retrieved from https://www.americanexpress.com/en-us/business/trends-and-insights/
articles/attestation-services-the-tools-that-may-help-you-avoid-an-audit/
AccountingTools (2021). Audit engagement definition. Retrieved from
https://www.accountingtools.com/articles/2017/9/4/audit-engagement
Securities and Exchange Commission (2005). Retrieved August 3, 2021 from
https://www.sec.gov.ph/wp-content/uploads/2019/12/2005Rule_68.pdf
AccountingTools (2021). Financial statement audit definition. Retrieved from
https://www.accountingtools.com/articles/what-is-a-financial-statement-audit.html

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Internal Auditing (Auditing and Assurance Principles)

or the financial statement audits. It is mostly done by a practitioner or a third

regulations of the Generally Accepted Accounting Principles (GAAP).

2. Differentiate the following:

- It is rendered by an independent professional accountant who impart reliability

and credibility to the financial statements by a conclusion. It also increases the

confidence of the intended users of the subject matter on the practitioner’s

conclusion or outcome of the examination.

assurance as to the reliability, credibility and truthfulness of the subject matter or

most intensive level of attestation is said to be the examination of historical

subject or the financial audit (Shelton Hal).

- Audit engagement can be said to be a consultation or an arrangement of the

entity or business owner to the practitioner or auditor to perform audit to its

engagement letter done by the consultant then sent to the client.

5. Financial Statements Audit

- It is the investigation of the subject matter or financial statements of the company

to add credibility and reliability to the reports of the business. It is done by an

financial statements when they given to the intentional users of information.

3. Why do we perform Financial Statements Audit? What is its importance and

for whom do we perform such?

truthfulness to the subject matter of an entity and its performance. It is also to

4. Who can perform a financial statements audit?

Exchange Commission (SEC) and Board of Accountancy (BOA) are allowed to

conduct auditing of financial statements.

AccountingEDU Staff (2021). Retrieved August 3, 2021 from

Cabrera, M. & Cabrera G. (2020). Principles of Auditing and Assurancce Services(2020-

2021 ed.). GIC Enterprises & Co., Inc.

CPA Reviewees (2020 ed.).

Retrieved from https://www.americanexpress.com/en-us/business/trends-and-insights/

AccountingTools (2021). Audit engagement definition. Retrieved from

Securities and Exchange Commission (2005). Retrieved August 3, 2021 from

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