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ASSURANCE AND NON-ASSURANCE - Coggle Diagram
ASSURANCE AND NON-ASSURANCE
Complication of Financial Information
include collecting, classifying and summarizing of financial information
no assurance express on financial statement
objective for accountant to use accounting expertise to collect, classify and summarize financial information, produce a report and no assurance is expressed
need to comply with Code of Ethics for Professional Accountants issued by IFAC
ensure that there is clear understanding between client and the accountant regarding terms of engagement
Procedures of Complication of Financial Information
general understanding of nature of entity's business transactions, form of accounting records and qualifications of accounting personnel
obtain acknowledgment from management of its responsibility for appropriate presentation of financial information
obtain knowledge about accounting policies and practices of industry in which entity operate
accounting basis on which financial statements are to be presented and form and content of financial statements
obtained general knowledge of business and operations of entity
Internal Auditing
objective is to assist members of organization in effective discharge of their responsibilities
furnishes them with analyses, appraisals, recommendations, counsel and information concerning activities reviewed
Differences internal auditor vs external auditor
External Auditor
serve third party who need reliable financial performance
independent of management and BPD both in fact and mental attitude
independent contractor, third party who is external to organization
concerned with prevention and detection of fraud general but directly concerned when financial statements may be materially affected
report to the shareholders
review financial statements to ensure it is free from material misstatements and express opinion whether it is true and fair view
review supporting financial statements periodically and focuses on accuracy and understandability of historical events
compulsory to be member of MIA and granted audit license by ministry of Finance before can be recognized as Chartered Accountant
Internal Auditor
independent of the activities audited
directly involved with prevention and detection of fraud
serve needs of organizations
evaluate governance, control and risk management processes
most of time is an organization's employee
report to audit committee or BOD
review activities continually by focusing on future events
may acquire certified internal auditor