Demystifying the Auditor's Gathering of Evidence: Part One
The result of a company's daily transaction of business is summarized in the financial statements. In these statements, we can see how established the company is, if it is earning or not, and if it is using its resources well. As such, the preparation of the financial statements is a complete managerial responsibility. Just because the management has absolute control on the data presented in the financial statements, the users, such as creditors and government regulatory bodies, cannot put a high reliance on it. This is the reason why CPA's are hired to conduct audits.
The auditor's responsibility is to express an opinion as to whether the financial statements are presented in accordance with certain criteria, usually generally accepted accounting principles. As part of the process, the auditor has the primary objective of detecting material understatements or overstatements embodied in the financial statements. In order to do so, the auditor gathers evidence to provide an adequate basis for his opinion. To guide the auditor in performing the activity, the Auditing Standards and Practices Council (ASPC) issued Statement of Auditing Standards of the Philippines (SASP) No. 7 - Audit Evidence and Documentation. In this statement, the third standard of fieldwork is laid: "Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmations to afford a reasonable basis for an opinion regarding the financial statements under examination."
It could be noted that the evidential matter should be "sufficient" and "competent." What constitute sufficiency and competence of evidence is a question that constantly perplexes the auditor in planning and performing the audit. Different situations call for different approach; unfortunately, there are no fast rules that can be readily applied to all situations. However, there are some generalizations made to guide the auditor in obtaining evidence, and these principles affect both the competence and sufficiency of evidence.
Related Tags: article, writing, article writing, report writing, evidence, essay writing, book report, essay-papernet, literature review, article review, auditor
The article was produced by the writer of Essay-Paper.net. Olivia Hunt is a 4-years experienced freelance writer of Essay Writing Service. Contact her to get information about descriptive essay writing and college essay help at our website.
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- 8 Differences Between Traditional Businessmen And Entrepreneurs
The difference between traditional businessmen and entrepreneurs is not huge-it could be a thin-line - Airless Container Packaging Technology
The choice of an airless container wasn't an impulsive decision for many brand marketers nowadays. T - Laser Processing Of Metals
You may have known that lasers produce very powerful and exact beams of light. As a result, they can - Titanium Metal Powder
Have you ever thought about that how a heavy aircraft can fly high in the air without falling to the - Race To Icd-10 In Healthcare Outsourcing
Healthcare organizations are running a race against time to achieve ICD-10 compliance in medical bil - Benefits Of Tig Welding Machines - The Leading Special Welding Machines
The TIG welding process allows a welder exacts controls which result in a clean weld blob. TIG weldi - Full Time It Support Or Flexible It Support?
When you're choosing what type of IT support to take on for your business, it can be tricky to deter - The Best Sticker Products - Vinyl, Motorcycle & Helmet Stickers
Are you looking for some of the really best sticker printing products? If yes, then it is none other - Jobs At Home: 5 Practical Tips That Will Help Work-at Home Moms Get Organized
As a work at home mom who has successfully been doing it for quite a while now, I have realized that - Choose A Right Virtual Assistant Company For Your Staffing Difficulty
If you simply waste your precious time on daily routines that can easily assign to an employee, Virt
Most viewed articles in this category:
- Discover How to Entertain on a Budget
To most people these two words, entertain and budget, are miles apart. But they don't have to be. Wh - Six Reasons the Merlin Magix is Ideal for your Business
Why the Merlin Magix Phone System Integrated Phone System is ideal as your business phone system - Indian IT's Off-shore Gains
recent revised guidance of Satyam Computer Services (Satyam), the over $1-billion Indian IT se - 7 Sure-Fire Time Management Tricks To Get More Done
Do you know why you don't get all the stuff on your to-do list done? Sometimes it's as sim - How to be Successful in Business
Starting a business and making it work is the primary purpose for having a business to begin with. I - Setting Up a Decorative Painting Portfolio - How Do You Do It?
Setting up a professional looking portfolio is essential to impressing and obtaining clients as they - Home Business Taxes-How To Stop Taxes In Your Home Business From Sneaking Up On You
"Sixty thousand dollars? You guys are joking right?" I had just completed my first year of being fai - The #1 Small Business Phone System
T h e N o . 1 s m a l l - b u s i n e s s phone s y s t e m . . . s i m p l y p o w e r f u l . . .p - Training Employees Within A Budget
Businesses have spent a lot on employee training and their development in order to improve sales, cu - Hollander Consultants Ends 2006 with its Second Highest Year Ever
Hollander Consultants Also has Second Highest 4th Quarter Ever Tualatin, OR: Hollander C