Audit Assignment Sample
Q1:
Answer :Q.1Ans. Auditing is the process of verifying the workings of the organisation. It checks all the financial data and cross-checks for any mistakes or errors. There is internal and external auditing. Here is the key difference between Internal Auditing and External Auditing:
|
Features |
Internal Auditing |
External Auditing |
|
Objective |
Internal auditing focuses on improving the operations of the organisation. |
External auditing focuses on assisting with the financial statements of the organisation. |
|
Scope |
Internal auditing covers subjects like operations, compliances and risk management of the organisation. Internal auditing also works for processes like procurement for the organisation and all asset management processes. |
External auditing covers topics like financial statement verifications, financial reporting and material misstatements. External auditing also works in the processes of reviewing financial statements and works to minimise the risk of material misstatements. |
|
Stakeholders |
Internal auditing is based on finding the best processes for the management of the organisation. |
External audits work for the benefit of external stakeholders of the organisation like investors and liability holders of the organisation. |
Q.2 Ans. Corporate governance is important to ensure that the organisation is working positively on their objectives. Internal audits are required to be completed in every corporation to assure that the working is effective and all the financial risks of the organisation are managed properly.
Internal audits help to check the framework of the organisation and identify any issues related to the finances. Internal audits help to control the design of controls and improve its effectiveness. It helps in monitoring the auditing controls.
Risk management is also done easily by Internal audits. When any errors are found, they are corrected simultaneously to keep the organisation error-free. Risk assessment and mitigation is very important for the corporation to be safe from sudden losses.
Internal audits support the corporation in managing its workers. It helps with making informed decisions and helps the organisation to achieve its strategic objectives with all compliances followed correctly.
Q.3 Ans. Internal auditing is a significant step for organisations to check and review their workings. It has various steps including follows:
Step 1 - Planning:The auditors plan the audit and finalise the scopes to be checked during the audits. Audits can be specified to only major areas of organisational working or they can just be to assess the major risk areas of the organisation.
Step 2 - Execution: This is the step when auditors are working to gather the audit evidence. It includes processes like document verifications, transactional statement checks and testing.
Step 3 - Reporting: This is done after the audit checking is completed. The management gathers the results for the audit and highlights the significant details found. A SWOT analysis is done to check the results and then suggestive actions for weaknesses are created.
Step 4 - Follow-ups: After the implementation of corrective measures, auditors verify that the suggestive actions are generating positive results. These follow-ups are required to verify that the work is improving for the organisation.