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 expresses his opinion on the measurement of subject matter against a criteria. This opinion will ultimately enhance the degree of […]
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 exists and that could be material, either individually or when aggregated with other misstatements. In simple words detection risk is […]
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 could be material, either individually or when aggregated with other misstatements, will not be prevented, or detected and corrected, on […]
What is the difference between Internal Control Questionnaires (ICQ) and Internal Control Evaluation Questionnaires (ICEQ)?
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 thus are distinct from each other. However, which one to use depends on auditor’s understanding of the entity, the risk […]
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 relevant. Users require financial statements to fulfill their information needs and in order to reach good decisions they must have accurate […]
What is Audit Evidence?
IAASB auditing standards use professional code of ethics issued by International Ethical Standards Board of Accountants (IESBA) to describe the ethical requirements for conducting an audit. However, accountancy bodies all over the world have their own ethical standards for their members working as accounting and auditors. One common requirement in every ethical standard is that […]
How sequentially numbered vouchers help auditors?
First of all let’s clear our confusions about the term Voucher itself. Voucher is any document on which an information about the business activity is recorded and the same is approved/authenticated/authorized by the relevant person in the management. Thus voucher is any document that proves that a particular transaction did happened and the person responsible […]
