Beruflich Dokumente
Kultur Dokumente
Audit Process
DE CASTRO, KENNETH MICHAEL A.
INSTRUCTOR, AMV-CoA
What is
Auditing?
And why is it necessary?
2
WHAT IS AUDITING?
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
intended users.
3
WHY IS AUDITING NECESSARY?
The issue of agency problem or the
perceived conflict of interest between two
parties (principal and the agent) that have
potentially different interests.
4
Overview of the
Audit Process
5
OFFER TO PROVIDE AUDIT
SERVICES
An auditor’s initial contact with its
prospective client is often through
its audit committee (in case of
publicly-listed companies) or simply
through its owners (in case of small
and medium-sized business)
6
PROHIBITION AGAINST
ENCROACHMENT
However, a CPA in public accounting shall
not attempt to provide a person or entity
with professional service which is currently
provided by another CPA, except:
(a) Request for audit services from a new
client with a previous auditor
7
PROHIBITION AGAINST
ENCROACHMENT
(b) Request for audit services from a
consolidated entity
8
PROHIBITION AGAINST
ENCROACHMENT
9
CLIENT ACCEPTANCE OR RE-
ACCEPTANCE
Establish policies and procedures on
deciding whether to accept or
continue an engagement, which may
include the following:
10
CLIENT ACCEPTANCE OR RE-
ACCEPTANCE
11
CLIENT ACCEPTANCE OR RE-
ACCEPTANCE
12
THE ROLE OF THE
ENGAGEMENT LETTER
If the prospective client is acceptable,
a written agreement should be reach
with the client through the audit
engagement letter, which has the
following roles:
13
THE ROLE OF THE
ENGAGEMENT LETTER
14
AUDIT PLANNING
15
AUDIT PLANNING
16
AUDIT PLANNING
17
INTERIM AUDIT WORK
19
INTERIM AUDIT WORK
20
SUBSTANTIVE TESTING
21
SUBSTANTIVE TESTING
22
COMPLETING THE AUDIT
(a) Review of subsequent events to
determine if said events will bear
impact on the auditor’s opinion on
the financial statements.
23
COMPLETING THE AUDIT
(c) Final analytical procedures to
provide an overall review of financial
information during the closing of the
audit.
24
ISSUANCE OF THE AUDIT
REPORT
The auditor’s report is the key
deliverable addressing the output of the
audit process.
25
ISSUANCE OF THE AUDIT
REPORT
26
THE NEW AUDITOR’S REPORT
27
THE NEW AUDITOR’S REPORT
28
THE NEW AUDITOR’S REPORT
29
THE NEW AUDITOR’S REPORT
30
ThankYou!
Kenneth Michael A. De Castro
decastro.kenneth@gmail.com