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It includes following procedures Knowledge of client's business, which includes financing, legal framework, government norms, investments, accounting policies, business risk and financial risk; Development of audit strategies or overall plan (who, when and how) Preparation of audit programmer
PCAOB AS5 indicates that inquiry procedures, regarding whether changes in the control process occurred between the interim and year-end period, may be sufficient in many cases to limit roll-forward testing. Revisit scope of locations or business units assessed: This is a complex area requiring substantial judgment and analysis.
Analytical procedures include comparison of financial information (data in financial statement) with prior periods, budgets, forecasts, similar industries and so on. It also includes consideration of predictable relationships, such as gross profit to sales, payroll costs to employees, and financial information and non-financial information, for examples the CEO's reports and the industry news.
Internal control procedures reduce process variation, leading to more predictable outcomes. Internal control is a key element of the Foreign Corrupt Practices Act (FCPA) of 1977 and the Sarbanes–Oxley Act of 2002, which required improvements in internal control in United States public corporations.
Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. [1]
Generally Accepted Auditing Standards, or GAAS are sets of standards against which the quality of audits are performed and may be judged. Several organizations have developed such sets of principles, which vary by territory.
Continuous auditing is an automatic method used to perform auditing activities, such as control and risk assessments, on a more frequent basis.Technology plays a key role in continuous audit activities by helping to automate the identification of exceptions or anomalies, analyze patterns within the digits of key numeric fields, review trends, and test controls, among other activities.
A software audit review, or software audit, is a type of software review in which one or more auditors who are not members of the software development organization conduct "An independent examination of a software product, software process, or set of software processes to assess compliance with specifications, standards, contractual agreements, or other criteria".