What does auditting involve?

Answer 1

Audit may refer to:

Audit - an evaluation of an organization, system, process, project or product
Auditing may refer to:

Auditing - the act of conducting an audit
An audit is an evaluation of an organization, system, process, project or product. It is performed by a competent, independent, objective, and unbiased person or persons, known as auditors. The purpose is to make an independent assessment based on management's representation of their financial condition (through their financial statements). Another purpose of the audit is to ensure the operating effectiveness of the internal accounting system is in accordance with approved and accepted accounting standards, statutes, regulations, or practices. It also evaluates the internal controls to determine if conformance will continue, and recommends necessary changes in policies, procedures or controls. Auditing is a part of some quality control certifications such as ISO 9000.

An important type of audit is the financial audit. It is designed to determine whether financial statements are fairly presented in accordance with International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP). In the United States, financial audits are required for all publicly registered companies. In addition, financial audits may be performed for private companies, registered charities, and some governmental and public entities. Private companies typically request financial audits year after year because lenders may have required an audit or owners may want to have external unbiased eyes look at the financial statements to determine if the company is complying with all the required accounting principles. Charities would require a financial audit to show the financial status of the organization to potential donors. Governments and government businesses are usually required to be audited by statutes to determine if all the money budgeted has been properly spent. Government financial reports are not always audited by outside auditors. Some governments have elected or appointed auditors.

There are 4 major companies that compete in the financial audits arena. They form what is known as the Big Four. These companies are international firms and are the most well known outside auditors in the industry. They are as follows in order of size:

1) PricewaterhouseCoopers

2) Deloitte Touche Tohmatsu, simply known as Deloitte

3) Ernst & Young

4) KPMG

There are many other audit firms competing with the big four. In the UK the medium sized firms are known as the mid-tier, many of which are international and increasingly are competing for work against the big four, especially following the recent large auditing scandals (eg Worldcom, Parmalat).

Answer 2

For the technical explanation see the link below.

Basically, to perform an audit means that ones records must be reviewed for accuracy. Most people think of IRS when they think of an Audit. That's when the IRS comes and reviews your financial records for accuracy to the returns you filed.

Auditing - Is the act of conducting an audit of records. The records could be of a company, stock room, financials, big business, small business, etc. There are many different areas where audits are conducted. You would need to examine records for accuracy based on the business, the problem and the area of need/ requirement for accuracy.

I hope that is too tongued twisted and helps you out some. See the link below.

Answer 3

Auditors have to audit the financial books of a company (mid sized to large). At the end of their audit they have to write and sign a report (usually a audit assistant calculates and writes that thing up). Auditing involves areas such as asset, receivables, payables, GL accounts, write off, bank accounts, cash, cash pool, etc. If the company is US and is assigned to the US stock exchange market then, according to SEC, they have to additionally audit according to Sarbanes Oxley act which involves security and IT security issues to avoid fraud. SOX also requires a report which has to be signed. There are audit seasons and usually auditors start with a pre-audit (where preparation is done) and a couple of months or weeks later the have the actual audit. Plus, auditors specialize in different sections because every section (i.e. banking, industrial, entertainment, etc.) requires different audit approaches.

Answer 4

Auditting is a part of accounts but there are many branches in auditing the meaning of audit means to check . the audit depends on u that u are in which field for eg if u are in a financial institution u will audit the stock of the person to whom u are providing finance. if u r amalgamating with other firm ur companies auditor will go and check the financial status of the amalgamating company in the market. the work of the auditor is to check what ever he is instructed to check and he finally makes a report and presents in fornt of the higher authority and based on the audit report the further decision is taken. the most of the auditing is done by chartered accounts most of the auditors are chartered accounts

Answer 5

There are lots of different types of auditing - financial, performance, operational and service, to name but a few. Audits can be internal or external.

An audit for whatever reason, is an official examination of whatever or whoever is being audited. The audit can be formal or informal, usually the results are given to whoever commissions the audit.

There are various auditing tools for the different types of audit.

Answer 6

You may find it interesting to know ther word "audit" was derived from the same root words as our term "audio" --- so it means roughly "let's hear the truth". My niece is a certified CPA and audits accounts for a living. As other answers have stated, an audit is simply checking all the facts (and any arithmetic involved) to find the truth about what is going on.

Answer 7

If you are auditing a company there are 2 different types External and internal auditting
External means that an auditor will come in and examine the accounts/financial statements to test as to whether they are a fair and reasonable, to the extent of truth.
Internal means that someone usually management will look at areas of the company to see if it is being run effectively and efficiently and if not look at areas that can be improved

Answer 8

It's when a compnay or individual has his/her business records gone over by either soemone hired by them(most bsinesses and banks hire outtside auditors to satify State and Federal requirements. It is required for taxes, and in all public companies ot make sure they are being trueful to their investors whichis why so many large investiment executives go to jail.
The feds such as the Irs may audit you or your business at will if they suppect wrong doing or wish to punish someone.
Some companies asking for government bids, and private ones t are audited to ensure they have the financial, and physical ability to complete the jobs.
Walmarts has many businesses audited annually to see if they can provide the merchandise they wish to sale in walmarts stores. Walmarts also use this as an excuse to keep prices down.. If they determin you are a small company needing their company to survive they will bleed you dry.

Answer 9

Auditing involves taking classes at University without getting credit for them (thus no effect on the GPA).

Answer 10

An audit (auditing) is a formal, documented review of policy's and procedure's as outlined in a company's operating manual and business plan.
There are financial audits, operational audits, safety audits, etc., etc.