Auditing Case

Auditing is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users (Boynton, & Johnson (2006)). This process consists of financial information the auditor gathers about a company, evaluating that information and then reporting it by giving his or her opinion of the fiscal position of the company or organization in an impartial method. Auditors evaluated the company’s financial statements to make sure that it follows rules and regulations set by the GAAP or any other standards that apply. Auditor normally put together a report of what they find about a company financial statement and submits this report to the proper authorities. The validity of an entities financial statements and the accuracy of their internal controls can be very important in decision-making processes (www.bignerds.com).

According to W.C. Boynton and R. Johnson (2006), there are ten generally accepted auditing standards that fall under three main categories:

General standards

(i) audits are to be performed by a trained and proficient auditor,

(ii) all matters relating to the assignment should be addressed with independence in mental attitude,

(iii) due professional care is to be exercised;

Standards of field work

(i) work is to be adequately planned and properly supervised,

(ii) to assess the risk of material misstatements, a sufficient understanding of the entity is necessary,

(iii) competent audit evidence is to be obtained through auditing procedures performed to afford a reasonable basis for an opinion;

Standards of reporting

(i) report whether the financial statements are presented in accordance with generally accepted accounting principles,

(ii) report the circumstances in which principles have not been consistently observed in the current period,

(iii) informative disclosures in the financial statements are to be reasonably adequate,

(iv) report an expression or opinion regarding financial statements.

When an auditor reviewed a company financial statement, policies, and procedures it is said that a financial statement audit has occurs. This is performed in coordination with GAAP and other established criteria when obtaining evidence about a company presentation of its financial position. According to wisegeek.org:

The auditor examines a