An audit is an independent examination that gathers and evaluates evidence so an auditor can express an opinion about a subject. This lesson introduces the purpose of auditing, the assurance it provides, and the historical roots of the practice.
An audit is an independent examination of financial information or another subject, whether the entity is profit-oriented or not and regardless of its size or legal form. Auditing also helps determine whether accounting records are maintained as required by law.
All flashcards
What is an audit?
An independent, evidence-based examination that evaluates a subject and supports an opinion.
What is a statutory audit?
A legally required review of an entity's financial statements and records.
What is materiality in an audit?
The significance of an error or omission, considering its amount and nature.
What is a risk-based audit?
An audit approach that prioritizes areas according to their significance and exposure.
What is a forensic audit?
An investigative audit that seeks evidence of fraud, missing money, or negligence.
Quiz questions
What distinguishes an integrated audit of a publicly traded company under the Sarbanes–Oxley framework?Answer: It provides opinions on financial statements and internal control over financial reporting.
What is a central purpose of an internal audit function?Answer: To provide objective assurance and consulting focused on risk, control, and governance.
Which areas are central to an information technology audit?Answer: Asset protection, data integrity, and effective operation of information systems.
What is a primary purpose of a mid-project audit?Answer: To give the project team an interim view of progress and areas to improve.
What is the purpose of a performance audit?Answer: To assess how economically, efficiently, and effectively resources are used.
Based on the Wikipedia article Audit, licensed CC BY-SA 4.0. Adapted into a summary, flashcards and quizzes.