Question

describe what is the difference between the audit of financial statements and the audit of internal controls for U.S public companies. write 10-12 sentences.

Answer 1

Audit Of Financial Statements.

• Books of accounts , fianancial report and data are critical examined and analyised in Audit.
• Audit of financial statement by auditor means finding out whether the books of accounts are showing True and Fair financial postion of the company or not.
• Audit is mainly done to find out frauds and errors in the books of accounts and fianancial report and data.
• Audited financial's are more reliable and useful for internal and external users.
• There are main three types of audit.

1. External audits.
2. Internal audits.
3. Internal Revenue Service audits.

Audit Of Internal Control.

• Internal control system is a method or process assist in achieving the organization objective of effective and efficient conduct of business, prevent and detect fraud and errors, providing reliable financial information and reports to the different users.
• Audior have to find out whether Interal control system is effective or not and whether it is properly implemented within the organisation or not , Audit can recommend any change in the internal contral system if he or she found any lack in it.
• If the the inernal control system is good than the auditor can rely on the fianancial report and data provided to him/her for the audit process.
• A good Internal control system help in prevention and detection of fraud within the organisation.
• There are main three types of internal controls system.

1. Detective Control.
2. Preventative Control.
3. Corrective Control.