2. The word ‘Audit’ originated from the Latin word ‘Audire’ which means ‘to hear’.
Auditing is the on-site verification activity, such as inspection or examination, of a process or quality
system, to ensure compliance to requirements.
An audit can apply to an entire organization or might be specific to a function, process, or production
step.
IT Audit
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3. The different phases of an audit are given as :
Audit preparation
Audit performance
Audit reporting
Audit follow-up and closure
Phases of an Audit
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4. Types of Audits
Different types of Audits:
• Financial audits
• Operational audits
• Integrated Audit
• Forensic audits
• Investigative audits
• Compliance audit
• IS audits
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5. Financial Audit
• A third-party examination of a company's financial records and reporting activates.
• Its objective is to review the financial statements;
• And to state whether these statements provide true view of transactions performed by an
organization.
• The audit opinion is intended to provide reasonable assurance, but not absolute assurance, that the
financial statements are presented fairly, in all material respects, and/or give a true and fair view in
accordance with the financial reporting framework.
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6. Operational Audit
• Operational Audit is a systematic review of effectiveness, efficiency and economy of operation.
• A future-oriented, systematic, and independent evaluation of organizational activities.
• Financial data may be used, but the primary sources of evidence are the operational policies and
achievements related to organizational objectives.
• Internal controls and efficiencies may be evaluated during this type of review.
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7. Integrated Audit
• This is a combination of an operational audit, department review, and IS audit application controls
review.
• An audit is called an integrated audit, where auditors, in addition to an opinion on the financial
statements, must also express an opinion on the effectiveness of a company's internal control over
financial reporting
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8. Forensic Audit
• 'Forensic Audit' An examination and evaluation of a firm's or individual's financial information for
use as evidence in court.
• A forensic audit can be conducted in order to prosecute a party for fraud, embezzlement or other
financial claims.
• Forensic auditing aims at legal determination of whether fraud has actually occurred.
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9. Investigative Audit
• This is an audit that takes place as a result of a report of unusual or suspicious activity on the part
of an individual or a department.
• It is usually focused on specific aspects of the work of a department or individual.
• An investigative audit is the same as a forensic audit.
• When fraud or theft is uncovered, the investigative auditor compiles evidence and is often asked
to testify if the individual responsible for the theft is eventually prosecuted.
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10. Compliance Audit
• A compliance audit is a comprehensive review of an organization's adherence to regulatory
guidelines.
• Independent accounting, security or IT consultants evaluate the strength and thoroughness
of compliance.
• For example, you may determine whether the business is complying with U.S. Environmental
Protection Agency (EPA) standards on the dumping of toxic waste.
• Or you may look at whether a credit card company is following federal law with regards to
charging its cardholders allowable fees and interest.
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11. Visit our websites :
http://www.ifour-consultancy.com
http://www.ifourtechnolab.com
References :
http://smallbusiness.chron.com/advantages-disadvantages-investigative-auditing-firms-
35893.html
https://en.wikipedia.org/wiki/Financial_audit
http://resource.cdn.icai.org/11007p359-364sep04.pdf
For more details :
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