Question

Answer the Following Questions in detail

1. Differentiate between “Auditing” and “Accounting”

. 2. What are different Types of Risks? Explain the importance of auditing in reducing information risk, the causes of information risk, and explain how this risk can be reduced.

3. What do you understand by Quality Control Standards & Practices within the Accounting Profession?

4. What do you understand by the term “Audit Report”?

5. What the 4 Categories of Audit Report? Briefly Explain

6. What is an Unqualified/Clean Report? and Qualified Report? Give Examples for each

7. What are the parts of the Unqualified Audit Report ?

8. What is “Going Concern Principle”? What are the implications of this principle? How does it affect Balance Sheet – explain briefly? What are the responsibilities of an Auditor if this is at stake?

9. What is “MATERIALITY” in Auditing? Explain how MATERIALITY affects audit reporting decisions in details.

Answer 1

Solution 1

Difference between Accounting & Auditing is as follows:-

BASIS	ACCOUNTING	AUDITING
Meaning	Accounting means systematically keeping the records of the accounts of an organization and preparation of financial statements at the end of the financial year.	Auditing means inspection of the books of account and financial statements of an organization.
Governed By	Accounting Standards	Standards on Auditing
Work performed by	Accountant	Auditor
Purpose	To show the performance, profitability and financial position of an organization.	To reveal the fact, that to which extent financial statement of an organization gives true and fair view.
Start	Accounting starts where bookkeeping ends.	Auditing starts where accounting ends.
Period	Accounting is a continuous process, i.e. day to day recording of transactions are done.	Auditing is a periodic process.