What is meant by sufficient appropriate audit evidence and how is it obtained?
It is the responsibility of the auditor to obtain reasonable assurance by conducting audit engagement and expressing his opinion in the audit report. This expression of opinion results in reasonable assurance which is conveyed...
Why auditor cannot provide Absolute level of assurance in audit engagement?
According to International Standards on Auditing ISAs, auditor is required to obtain reasonable assurance whether financial statements give true and fair view or in others words he must be reasonably sure that financial statements...
What is meant by Sale or Return?
Buying and selling arrangements between sellers and buyers may take different forms and sales contracts can have some unusual terms agreed between the parties.
However, one of the common arrangements between supplier and customer is 'sale or...
What is meant by Audit evidence?
Auditors objective or in simple words responsibility with respect to audit engagement is only to the extent of expression his opinion on financial statements whether they have been prepared in accordance with applicable financial...
What is meant by Assertions in audit or auditing?
Assertions or management assertions in audit or auditing simply means what management claims. For example, if a management states that internal controls are effective then it is a claim or assertion made by management.
Similarly,...
What is the difference between Attestation engagement and Direct reporting engagement in auditing?
Before we discuss the difference between attestation engagement and direct reporting engagement, lets understand what is assurance engagement at first place.
Assurance engagement is simply an engagement conducted by a practitioner at the end of which he...
What is Detection risk?
According to International Auditing Standards detection risk is defined as follows:
The risk that the procedures performed by the auditor to reduce audit risk to an acceptably low level will not detect a misstatement that...
What is Control risk?
Control risk has been defined under International Standards of Auditing (ISAs) as following:
The risk that a misstatement that could occur in an assertion about a class of transaction, account balance or disclosure and that...
What is the difference between Internal Control Questionnaires (ICQ) and Internal Control Evaluation Questionnaires...
Internal controls questionnaires (ICQ) and Internal controls evaluation questionnaires (ICEQ) are basically two modes of documenting entity's internal control system while auditor applies risk assessment procedures and tests of controls.
Both serve different purposes and...
What is the difference between Internal Audit Function and Internal Control System?
Let's refresh some important areas before we get to the answer to this question so that no room is left for confusions. I will be having a quick go through each topic that is...