The 30,000foot View of Financial Auditing

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The 30,000-foot View of Financial Auditing
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Financial Statements -Income Statement -Balance
Sheet -Cash flow Statement -Notes to F/S
Client
Auditor

• The auditor must be
• Competent
• Accounting
• Auditing
• Clients business
• Ethical
• Independent
• In fact
• In appearance

Audit Opinions -Financial Statements GAAP AS or
GAAS -Internal control over financial reporting
(ICFR) AS5
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Financial Statements -Income Statement -Balance
Sheet -Cash flow Statement -Notes to F/S
Trial Balance
General Ledger
Journal Entries
Systematic J.E.s
Manual J.E.s
Source Documents
Processes Controls
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Client
Auditor
Financial Statements -Income Statement -Balance
Sheet -Cash flow Statement -Notes to F/S
Audit Opinions -Financial Statements -Internal
control over financial reporting (ICFR)

• Selected Client Evidence
• Risk analysis
• Sampling
• Materiality
• Observation
• Walk through
• Flowcharting
• Inquiry
• Testing
• Analytic procedures
• Etc.

Trial Balance
General Ledger
Journal Entries
Systematic J.E.s
Manual J.E.s
Source Documents
External Evidence
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Auditor
Audit Opinions -Financial Statements -Internal
control over financial reporting (ICFR)

• Selected Client Evidence
• Risk analysis
• Sampling
• Materiality
• Observation
• Walk through
• Flowcharting
• Inquiry
• Testing
• Analytic procedures
• Etc.

• Work Papers
• Collecting
• Reviewing

External Evidence
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Assurance Engagements

• Attestation Engagements
• Operational audits, Compliance audits, etc.
• AICPA ATs

Only CPAs Can Do This One!