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Message: <blockquote data-quote="thelaa rox" data-source="post: 4427664" data-attributes="member: 175273">AuditJump to: <a href="http://en.wikipedia.org/wiki/Audit#column-one" target="_blank">navigation</a>, <a href="http://en.wikipedia.org/wiki/Audit#searchInput" target="_blank">search</a>For other uses, see <a href="http://en.wikipedia.org/wiki/Audit_(disambiguation)" target="_blank">Audit (disambiguation)</a>.<a href="http://en.wikipedia.org/wiki/File:Ambox_globe_content.svg" target="_blank"><img src="http://upload.wikimedia.org/wikipedia/commons/thumb/b/bd/Ambox_globe_content.svg/40px-Ambox_globe_content.svg.png" alt="" class="fr-fic fr-dii fr-draggable " style="" /></a>The examples and perspective in this article may not represent a <a href="http://en.wikipedia.org/wiki/Wikipedia:WikiProject_Countering_systemic_bias" target="_blank">worldwide view</a> of the subject. Please <a href="http://en.wikipedia.org/w/index.php?title=Audit&action=edit" target="_blank">improve this article</a> or discuss the issue on the <a href="http://en.wikipedia.org/wiki/Talk:Audit" target="_blank">talk page</a>.<a href="http://en.wikipedia.org/wiki/File:Money_Coin_Icon.svg" target="_blank"><img src="http://upload.wikimedia.org/wikipedia/commons/thumb/6/67/Money_Coin_Icon.svg/75px-Money_Coin_Icon.svg.png" alt="" class="fr-fic fr-dii fr-draggable " style="" /></a><a href="http://en.wikipedia.org/wiki/Accountancy" target="_blank">Accountancy</a>Key concepts<a href="http://en.wikipedia.org/wiki/Accountant" target="_blank">Accountant</a><a href="http://en.wikipedia.org/wiki/Bookkeeping" target="_blank">Bookkeeping</a><a href="http://en.wikipedia.org/wiki/Trial_balance" target="_blank">Trial balance</a><a href="http://en.wikipedia.org/wiki/General_ledger" target="_blank">General ledger</a><a href="http://en.wikipedia.org/wiki/Debits_and_credits" target="_blank">Debits and credits</a><a href="http://en.wikipedia.org/wiki/Cost_of_goods_sold" target="_blank">Cost of goods sold</a><a href="http://en.wikipedia.org/wiki/Double-entry_bookkeeping_system" target="_blank">Double-entry system</a><a href="http://en.wikipedia.org/wiki/Standard_accounting_practice" target="_blank">Standard practices</a><a href="http://en.wikipedia.org/wiki/Comparison_of_Cash_Method_and_Accrual_Method_of_accounting" target="_blank">Cash and accrual basis</a><a href="http://en.wikipedia.org/wiki/Generally_Accepted_Accounting_Principles" target="_blank">GAAP</a> / <a href="http://en.wikipedia.org/wiki/International_Financial_Reporting_Standards" target="_blank">IFRS</a><a href="http://en.wikipedia.org/wiki/Financial_statements" target="_blank">Financial statements</a><a href="http://en.wikipedia.org/wiki/Balance_sheet" target="_blank">Balance sheet</a><a href="http://en.wikipedia.org/wiki/Income_statement" target="_blank">Income statement</a><a href="http://en.wikipedia.org/wiki/Cash_flow_statement" target="_blank">Cash flow statement</a><a href="http://en.wikipedia.org/wiki/Ownership_equity" target="_blank">Ownership equity</a><a href="http://en.wikipedia.org/wiki/Statement_of_retained_earnings" target="_blank">Retained earnings</a>Auditing<a href="http://en.wikipedia.org/wiki/Financial_audit" target="_blank">Financial audit</a><a href="http://en.wikipedia.org/wiki/Generally_Accepted_Auditing_Standards" target="_blank">GAAS</a><a href="http://en.wikipedia.org/wiki/Internal_audit" target="_blank">Internal audit</a><a href="http://en.wikipedia.org/wiki/Sarbanes-Oxley_Act" target="_blank">Sarbanes-Oxley Act</a><a href="http://en.wikipedia.org/wiki/Big_Four_auditors" target="_blank">Big Four auditors</a>Fields of accounting<a href="http://en.wikipedia.org/wiki/Cost_accounting" target="_blank">Cost</a> • <a href="http://en.wikipedia.org/wiki/Financial_accountancy" target="_blank">Financial</a> • <a href="http://en.wikipedia.org/wiki/Forensic_accounting" target="_blank">Forensic</a><a href="http://en.wikipedia.org/wiki/Fund_Accounting" target="_blank">Fund</a> • <a href="http://en.wikipedia.org/wiki/Management_accounting" target="_blank">Management</a> • <a href="http://en.wikipedia.org/wiki/Tax_accounting_in_the_United_States" target="_blank">Tax</a>This box: <a href="http://en.wikipedia.org/wiki/Template:Accounting" target="_blank">view</a> • <a href="http://en.wikipedia.org/wiki/Template_talk:Accounting" target="_blank">talk</a> • <a href="http://en.wikipedia.org/w/index.php?title=Template:Accounting&action=edit" target="_blank">edit</a>The general definition of an audit is an evaluation of a person, organization, system, process, project or product. Audits are performed to ascertain the <a href="http://en.wikipedia.org/wiki/Validity_(statistics)" target="_blank">validity</a> and <a href="http://en.wikipedia.org/wiki/Reliability_(statistics)" target="_blank">reliability</a> of information; also to provide an assessment of a system's <a href="http://en.wikipedia.org/wiki/Internal_control" target="_blank">internal control</a>. The goal of an audit is to express an opinion on the person/organization/system (etc) in question, under evaluation based on work done on a test basis. Due to practical constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits. In the case of <a href="http://en.wikipedia.org/wiki/Financial_audit" target="_blank">financial audits</a>, a set of financial statements are said to be true and fair when they are free of material misstatements - a concept influenced by both quantitative and qualitative factors.Traditionally, audits were mainly associated with gaining information about financial systems and the financial records of a company or a business (see <a href="http://en.wikipedia.org/wiki/Financial_audit" target="_blank">financial audit</a>). However, recent auditing has begun to include other information about the system, such as information about environmental performance. As a result, there are now professions conducting <a href="http://en.wikipedia.org/wiki/Environmental_audits" target="_blank">environmental audits</a>.In <a href="http://en.wikipedia.org/wiki/Financial_accounting" target="_blank">financial accounting</a>, an audit is an independent assessment of the fairness by which a company's financial statements are presented by its management. It is performed by competent, independent and objective person(s) known as auditors or <a href="http://en.wikipedia.org/wiki/Accountant" target="_blank">accountants</a>, who then issue an <a href="http://en.wikipedia.org/wiki/Auditor%27s_report" target="_blank">auditor's report</a> based on the results of the audit.Such systems must adhere to generally accepted standards set by governing bodies regulating businesses; these standards simply provide assurance for third parties or external users that such statements present a company's financial condition and results of operations 'fairly'.Contents[hide]<ul> <li data-xf-list-type="ul"><LI class=toclevel-1><a href="http://en.wikipedia.org/wiki/Audit#Quality_audits" target="_blank">1 Quality audits</a> <LI class=toclevel-1><a href="http://en.wikipedia.org/wiki/Audit#Integrated_audits" target="_blank">2 Integrated audits</a> <LI class=toclevel-1><a href="http://en.wikipedia.org/wiki/Audit#Types_of_auditors" target="_blank">3 Types of auditors</a> <LI class=toclevel-1><a href="http://en.wikipedia.org/wiki/Audit#Major_auditing_firms" target="_blank">4 Major auditing firms</a> <LI class=toclevel-1><a href="http://en.wikipedia.org/wiki/Audit#Auditing_firms_around_the_world" target="_blank">5 Auditing firms around the world</a> <LI class=toclevel-1><a href="http://en.wikipedia.org/wiki/Audit#See_also" target="_blank">6 See also</a> </li> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/Audit#External_links" target="_blank">7 External links</a></li> </ul>//<a href="http://www.elakiri.com/forum/" target="_blank">http://www.elakiri.com/forum/</a>[<a href="http://en.wikipedia.org/w/index.php?title=Audit&action=edit&section=1" target="_blank">edit</a>] Quality auditsMain article: <a href="http://en.wikipedia.org/wiki/Quality_audit" target="_blank">Quality audit</a>Quality audits are performed to verify the effectiveness of a <a href="http://en.wikipedia.org/wiki/Quality_management_system" target="_blank">quality management system</a>. This is part of certifications such as <a href="http://en.wikipedia.org/wiki/ISO_9001" target="_blank">ISO 9001</a>. Quality audits are essential to verify the existence of objective evidence of processes, to assess how successfully processes have been implemented, for judging the effectiveness of achieving any defined target levels, providing evidence concerning reduction and elimination of problem areas and are a hands-on management tool for achieving continual improvement in an organization.To benefit the organization, quality auditing should not only report non-conformances and corrective actions but also highlight areas of good practice. In this way, other departments may share information and amend their working practices as a result, also enhancing continual improvement.<a href="http://www.elakiri.com/forum/" target="_blank">http://www.elakiri.com/forum/</a>[<a href="http://en.wikipedia.org/w/index.php?title=Audit&action=edit&section=2" target="_blank">edit</a>] Integrated auditsIn the US, audits of publicly-listed companies are governed by rules laid down by the <a href="http://en.wikipedia.org/wiki/Public_Company_Accounting_Oversight_Board" target="_blank">Public Company Accounting Oversight Board</a> (PCAOB). Such an audit is called an Integrated Audit, where auditors have the additional responsibilities of expressing opinions on the management's assessment of the firm's internal control and the effectiveness of internal control over financial reporting, based on their (the auditors') own assessment.<a href="http://www.elakiri.com/forum/" target="_blank">http://www.elakiri.com/forum/</a>[<a href="http://en.wikipedia.org/w/index.php?title=Audit&action=edit&section=3" target="_blank">edit</a>] Types of auditorsThere are two types of auditors:<ul> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/Internal_auditor" target="_blank">Internal auditors</a> are employees of a company hired to assess and evaluate its system of internal control. To maintain independence, they present their reports directly to the board of directors or to top management. They provide functional operation to the concern. Internal auditors are employees of the company, so they can easily find out fraud and any mishappenings.</li> </ul> <ul> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/External_auditor" target="_blank">External auditors</a> are independent staff assigned by an auditing firm to assess and evaluate financial statements of their clients or to perform other agreed-upon evaluations. Most external auditors are employed by accounting firms for annual engagements. They are called upon from outside the company.</li> </ul><a href="http://www.elakiri.com/forum/" target="_blank">http://www.elakiri.com/forum/</a>Major auditing firmsThe four largest accounting firms in the world are collectively referred to as the <a href="http://en.wikipedia.org/wiki/Big_Four_auditors" target="_blank">Big Four</a>. They are as follows:<ul> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/PricewaterhouseCoopers" target="_blank">PricewaterhouseCoopers</a>, also known as PwC.</li> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/Ernst_%26_Young" target="_blank">Ernst & Young</a>, also known as EY.</li> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/KPMG" target="_blank">KPMG</a>.</li> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/Deloitte_Touche_Tohmatsu" target="_blank">Deloitte Touche Tohmatsu</a>, also known as <a href="http://en.wikipedia.org/wiki/Deloitte" target="_blank">Deloitte</a>.</li> </ul>There are many other audit firms competing with the big four for major audit engagements. Competition has intensified in response to independence issues and other legislative requirements introduced as a consequence of the <a href="http://en.wikipedia.org/wiki/Arthur_Andersen" target="_blank">Arthur Andersen</a> scandal. In the US and Australia, these firms are called "mid-tier". Some of these include: <a href="http://en.wikipedia.org/wiki/Mazars" target="_blank">Mazars</a>, <a href="http://en.wikipedia.org/wiki/BDO_International" target="_blank">BDO International</a>, William Buck, Moore Stephens LLP, <a href="http://en.wikipedia.org/wiki/Grant_Thornton_International" target="_blank">Grant Thornton International</a>, McGladrey & Pullen, Hall Chadwick, Dauby O'Connor & Zaleski, LLC, <a href="http://en.wikipedia.org/wiki/PKF" target="_blank">PKF</a>, Pitcher Partners, Johnson Lambert & Co. LLP, <a href="http://en.wikipedia.org/wiki/Beard_Miller_Company" target="_blank">Beard Miller Company</a>, DFK International, <a href="http://en.wikipedia.org/wiki/Horwath_International" target="_blank">Horwath International</a> and UHY firm.In the UK, medium-sized firms are also called "mid-tier". Many of these firms are international, increasingly competing for work against the Big Four, especially following the recent large auditing <a href="http://en.wikipedia.org/wiki/Enron_scandal" target="_blank">scandals</a>.<a href="http://www.elakiri.com/forum/" target="_blank">http://www.elakiri.com/forum/</a>[<a href="http://en.wikipedia.org/w/index.php?title=Audit&action=edit&section=4" target="_blank">edit</a>] Auditing firms around the worldWhile the four major audit firms listed above provide audit services to the largest corporations in the United States of America, audit firms around the world are also in partnership with the Big Four. Since corporations hold offices in other parts of the world, they tend to be audited by affiliates of the Big Four to maintain consistency and uniformity in their application of auditing standards.<a href="http://www.elakiri.com/forum/" target="_blank">http://www.elakiri.com/forum/</a>[<a href="http://en.wikipedia.org/w/index.php?title=Audit&action=edit&section=5" target="_blank">edit</a>] See also<ul> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/Audit_risk" target="_blank">Audit risk</a></li> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/External_audit" target="_blank">External audit</a></li> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/Financial_audit" target="_blank">Financial audit</a></li> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/Internal_audit" target="_blank">Internal audit</a></li> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/Continuous_auditing" target="_blank">Continuous auditing</a></li> <li data-xf-list-type="ul"><a href="http://en.wikipedia.org/wiki/Lead_Auditor" target="_blank">Lead Auditor</a></li> </ul></blockquote>

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