I. Communication of audit findings is the ultimate objective of any audit.

II. For the audit to be useful, the results must be communicated to interested users on a timely basis.

It is a study of a specific unit of an organization for the purpose of measuring its performance. The main objective is to assess entity’s performance, identify areas for improvements and make recommendations to improve performance.

Provide minimum guidance for the auditor that helps determine the extent of audit steps and procedures that should be applied to fulfill the audit objective.

Elements of Quality Control

I. Independence, Integrity, and Objectivity

 II. Personnel Management

 III. Acceptance and Continuance of Clients and Engagements

Involves intentional misstatements or omissions of amounts or disclosures in the financial statements to deceive financial statement users.

It acknowledges its responsibility for the implementation and operations of accounting and internal control systems that are designed to prevent and detect fraud and error.

This may include Embezzling receipts, Stealing entity’s assets such as cash, marketable securities, and inventory, Lapping of accounts receivable.

Testing Phase

I. During the course of audit, the auditor may encounter circumstances that may

indicate the possibility of fraud or error.

II. After identifying material misstatement in the financial statements, the auditor should whether such a misstatement resulted from a fraud or an error.

Defines auditing by stating the objective of a financial statement audit, that is, to enable the auditor to express an opinion whether the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework.