Question

Demonstrate testing methods and sampling and analyze financial needs to make operational decisions in an Operation Audit, Compliance Audit, Financial Statement Audit.

Answer 1

• Operational audit is types of audit services that the review is mainly focused on the key processes, procedures, system, as well as internal control which the main objective is to improve the productivity, as well as efficiency and effectiveness of the operation.Operation audit has also targeted the leak of key control and processes that cause waste of resources and then recommend for improvement.Operational audit is the part of internal audit and their main aim is to add value to the business their professional services. Systematic and highly discipline is also the part that help to make sure the operational audit add value to the organization.

• A compliance audit is a comprehensive review of an organization's adherence to regulatory guidelines. Audit reports evaluate the strength and thoroughness of compliance preparations, security policies, user access controls and risk management procedures over the course of a compliance audit.What precisely is examined in a compliance audit varies depending on whether an organization is a public or private company, what types of data it handles, and if it transmits or stores sensitive financial data.For instance, a Sarbanes-Oxley Act compliance audit would have to prove that any electronic communication is backed up and secured with a reasonable disaster recovery infrastructure. Healthcare providers that store or transmit e-health records, including personal health information, are subject to Health Insurance Portability and Accountability Act laws and regulations. And financial services companies that transmit credit card data are subject to Payment Card Industry Data Security Standard requirements.In each case, organizations must be able to demonstrate compliance by producing an audit trail, often generated with data from event log management software, as well as internal and external audits.

• A financial statement audit is the examination of an entity's financial statements and accompanying disclosures by an independent auditor. The result of this examination is a report by the auditor, attesting to the fairness of presentation of the financial statements and related disclosures. The auditor's report must accompany the financial statements when they are issued to the intended recipients.The purpose of a financial statement audit is to add credibility to the reported financial position and performance of a business. The Securities and Exchange Commission requires that all entities that are publicly held must file annual reports with it that are audited. Similarly, lenders typically require an audit of the financial statements of any entity to which they lend funds. Suppliers may also require audited financial statements before they will be willing to extend trade credit (though usually only when the amount of requested credit is substantial). Audits have become increasingly common as the complexity of the two primary accounting frameworks, Generally Accepted Accounting Principles and International Financial Reporting Standards, have increased, and because there have been an ongoing series of disclosures of fraudulent reporting by major companies.