What is Auditing?

The video tutorial explains the concept of auditing, focusing on the examination of financial statements to ensure they are free from material errors. It highlights the role of external auditors, who must be certified public accountants in the US, and their process of gathering evidence to verify management assertions. The tutorial also discusses the comparison of financial statements with applicable reporting frameworks like GAAP and IFRS, and notes that audits are conducted for both public and nonpublic companies.

What is the primary purpose of an audit?

Who performs the examinations of financial statements in the US?

What are management assertions in the context of an audit?

How do auditors compare the financial statements prepared by management?

What are the two types of companies that undergo audits?