Name: Jalaica B. Rico Course & Year: BSA - 3 Instruction: Please Answer The Following Questions. Just Click The Reply Button and Type Your Answer

Name: Jalaica B.

Rico
Course & Year: BSA – 3

Instruction: Please answer the following questions. Just click the reply button and type your answer.

1. What is Auditing
Auditing typically refers to financial statement audits or an objective examination and evaluation
of a company’s financial statements – usually performed by an external third party. It is the examination
and verification of a company’s financial records. It is to ensure that financial information is represented
fairly and accurately and financial statements are prepared in accordance with the relevant accounting
standards.
2. In your own words, Why auditing is important?
It is important especially to the users because it provides credibility to a set of financial

statements and gives the shareholders confidence that the accounts are true and fair. It can also help to
improve a company’s internal controls and systems.
3. What is the purpose of auditing?
The objective of an audit is to make a conclusion regarding the financial statements' fairness and
conformance to relevant accounting principles.
4. What is the management responsibilities in audit(auditing)?
In addition to initiating, recording, processing, and reporting transactions as well as events and
conditions accordance with management's assertions represented in the financial statements, management
is responsible for creating and maintaining internal control.
5. What are the Professional Responsibilities of an Auditor?
The auditor has a duty to prepare and carry out the audit in order to get a reasonable assurance
regarding the absence of a major misstatement, whether brought on by fraud or error.
6. What is the auditor's action in performing an audit?
The auditor must investigate and verify all the information in the financial statement to get a fair
level of assurance that there are no major misstatements in the financial statements overall, whether they
are the result of fraud or error, and to publish an auditor's report that includes the auditor's opinion. The
auditor may also use assertions in assessing risks by considering different types of potential
misstatements that may occur and thereby designing audit procedures that are responsive to the assessed
risks.
7. What are the reporting results of an audit?
The result of the audit is an auditor's written opinion report. The four possible outcomes of an
audit are an unqualified opinion which is the highest form of assurance where the auditor gives assurance
the company's financial statements present fairly, in all material respects the financial position of the
company with no reservations , a qualified opinion which means that the auditor has found certain
current-period accounting procedures or applications to which he takes exception. In other words, the
auditor disagrees with the way management has treated certain current-year transactions or he is unable to
establish the potential outcome of certain accounting procedures management has used, a disclaimer of
opinion is a special type of audit report in which the auditor states that he expresses no opinion on the
financial statements or an adverse opinion which states that the financial statements do not fairly
represent, in all material respects, the financial position of the company in accordance with generally
accepted accounting principles..
8. What are the types of Audit?
There are three main types of audits: external audits, internal audits, and Internal Revenue Service
(IRS) audits. External audits are Audits performed by outside parties can be extremely helpful in
removing any bias in reviewing the state of a company's financials. The biggest difference between an
internal and external audit is the concept of independence of the external auditor. Internal audits are
employed by the company or organization for whom they are performing an audit, and the resulting audit
report is given directly to management and the board of directors. The results of the internal audit are
used to make managerial changes and improvements to internal controls. The purpose of an internal audit
is to ensure compliance with laws and regulations and to help maintain accurate and timely financial
reporting and data collection. Internal Revenue Service Audits performs audits to verify the accuracy of a
taxpayer’s return and specific transactions.
9. What are the types of Auditors?
The four types of Auditors are the external, internal, forensic, and government. The external
auditor is a third-party consultant who independently reviews a company's financial records, including
purchasing records, payroll, accounts payable and receivable, expense reports, inventory and tax
payments. External auditors look for financial misstatements resulting from errors, fraud or
embezzlement. Internal auditors perform the same functions as external auditors except that they are
employees of the company they are auditing. Internal auditors are important to a company's decision-
making process, as they look at aspects of the business such as risk management, corporate governance,
organizational objectives, operational efficiency and compliance. Internal auditors identify and help
rectify problems before an external audit. Forensic auditors perform audits with the understanding that
their findings will be used in a court of law for a trial or some form of mediation. Forensic audits are used
to investigate fraud, embezzlement or other financial crimes. A forensic auditor may be called upon to
testify during trial proceedings. Government auditors perform audits of government agencies and of
private businesses and individuals engaged in activities that are subject to government regulations.
Government auditors perform financial audits as well as compliance audits.
10. Why independence is essential in audit (auditing)?
By being independent, an auditor is more qualified to approach the audit process objectively and
perform the task with integrity. An independent audit offers company shareholders an expert, unbiased
opinion.

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Name: Jalaica B. Rico Course & Year: BSA - 3 Instruction: Please Answer The Following Questions. Just Click The Reply Button and Type Your Answer

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Name: Jalaica B.

2. In your own words, Why auditing is important?

It is important especially to the users because it provides credibility to a set of financial

3. What is the purpose of auditing?

4. What is the management responsibilities in audit(auditing)?

5. What are the Professional Responsibilities of an Auditor?

6. What is the auditor's action in performing an audit?

7. What are the reporting results of an audit?

8. What are the types of Audit?

9. What are the types of Auditors?

10. Why independence is essential in audit (auditing)?

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