Question

• Explain the different types of audits and the relationship of auditing, attestation, and assurance services.

Answer 1

Different types of audit :

1. Internal audit : Internal audit takes place within the entity.
2. External audit : External audit conducted by third party such as accountant, IRS Agency, etc
3. Financial audit
4. operational audit
5. cost audit
6. compliance audit
7. Revenue audit
8. Information system audit
9. Tax audit
10. payroll audit.
11. Forensic audit

Relationship between audit ,attestation and assurance services :

1.Auditing : performed to discover data , risk or compliance issues that may not have been know before audit took place

Auditing is a appraisal activity undertaken by independent auditor (external auditor) to provide assurance to a principal (Ex. shareholders or members) over a subject matter (ex.financial statement )which is primary responsibility of other person (Ex. Board of directors or management ) against given criteria or framework (IFRS or US GAAP)

In simple independent examination of records ,transaction and balances ,etc for the purpose of  obtaining sufficient appropriate audit evidence to form conclusion on the basis of conclusion to express an audit opinion.

2. Attestation : performed to evaluate and to review how true the data and information is when compared to stated purpose,internal control or system.

Attestation basically takes all data and information that has been gathered and checks its validity based up on agreed upon procedure engagement

3. Assurance work is performed to substantiate the data that is presented to the auditor(CPA).The accountant will give their opinion regarding the information that can be used by the company to make decision