Question

can someone explain what are the main steps in the auditing process with alot of explanation ??

Answer 1

Step 1: Define Audit Objectives

The main objectives of audit is to verify the accounts and to report whether the profit and loss account and Balance Sheet are properly drawn up according to the Companies Act and they exbhibit a true and fair view of the state of affairs of the concern. For this the auditor must carry out a process of examination and verification of the accounts and other related documents.

Step 2: Audit Annoucement

After audit objectives have been defined, an audit engagement memo to the management of the area that will be audited. The memo’s distribution list may include senior administration officials that have responsibility for the university unit. The purpose of the memo is to introduce the objectives of the audit, to detail the planned review process, and to set the expectations for the course of the audit.

Step 3: Audit Entrance Meeting

The auditee should provide an overview of major programs and operations, relevant contact names, relevant policies and procedures, and other information that will assist in the fieldwork.

Step 4: Field Work

The evaluation phase of the audit is referred to as fieldwork. This phase includes assessing the adequacy of internal controls and compliance, testing of transactions, records, and resources, and performing other procedures necessary to accomplish the objectives of the audit.

Step 5: Reviewing

This is also an evaluation phase conducted to find out any errors in audit.

Step 6: Audit Exit Meeting

It is the meeting scheduled at the end of an audit between the auditors and the representative auditees. This is when a draft report of audit findings and observations are discussed and presented.

Step 7: Audit Report
Management is expected to review audit issues and recommendations for completeness and accuracy and prepare a formal response and action plan.