International Auditing Overview
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Chapter 1 International Auditing OverviewAuditing is the accumulation and evaluation of evidence about information to determine and report the correspondence between the information and established criteria. (Audit itu kyk nyocokin financial info yg uda di publish sama kondisi asli + peraturan yg ada kyk PSAK). Output of auditing: audit opinion on audit report.Textbook pg 3, the function of auditing is to lend credibility to the financial statements. So, auditor enhances the usefulness and the value of the financial statements, but he also increases the credibility of other non-audited information released by management. (jd posisi auditor itu harus independent ga bias. Emang niat mo bikin financial statement yg dibikin perusahaan itu ga ada manipulasi).Accounting is recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making. (Accounting ya biasa gitu2 pembukuan gt yg useful buat management kalo bikin decision). Output of accounting: financial statement.Assurance service is an independent professional service that improves the quality of information for decision makers. (Assurance itu service yg ditawarkan jasa auditing yaitu meningkatkan kualitas financial report dengan cara ya di check gt info di dlmnya beneran apa ga). (kalo yg non assurance service ya misal kyk tax service, big4 juga offer jasa tax consultant gt2)Attestation service is a type of assurance service in which the CPA firm issues a report about the reliability of an assertion that is made by another party. (Attestation itu jasa yg di offer jasa auditing yg lebih detail tipe apa aja gt).5 CATEGORIES OF ATTESTATION SERVICE:Audit of historical financial statements(ini normal audit yg focus ke fairness of financial statements)Audit of internal control over financial reporting(focus ke effectiveness of internal control/operational perusahaan)Review of historical financial statements(mirip sm normal audit, tp ini lower level of assurance provided, jd evidence yg dikumpulkan dlm proses audit ga sebanyak yg normal, sering di pake buat company yg kecil2 ato biasa aja)Attestation services on information technology(focus ke reliability and security of electronic information and facilities)Other services(biasanya other service providednya itu extensions of the audit of historical financial statements, kyk minta written assurance dll)TYPES OF AUDIT:Operational auditEvaluate the efficiency and effectiveness of any part of an organization’s operating procedures and methods. (audit yg ngecheck efficiency and effectiveness operational/management perusahaan)Compliance auditDetermine whether the audited company is following specific procedures, rules, or regulations set by some higher authority. (audit yg ngecheck financial report yg di publish perusahaan itu sesuai dengan peraturan pembukuan yg berlaku apa ga kyk PSAK gt ato peraturan yg set sm pemerintah, CEO perusahaan, dll. INTINYA financial reportnya ngikutin peraturan apa ga)
Financial statement auditDetermine whether the financial statements are stated in accordance with specific criteria. (audit yg ngecheck financial report perusahaan itu sesuai dengan kondisi asli perusahaan apa ga, “reliability”)Financial Accounting Standards: International Financial Reporting Standards (IFRS), formerly called International Accounting Standards (IAS), which are set by the International Accounting Standards Board (IASB). (Indo punya PSAK, US punya US GAAP)AUDITING STANDARDS:International Auditing and Assurance Standards Board (IAASB) issues International Standards on Auditing (ISAs). ISAs then later developed by International Federation of Accountants (IFAC). ISAs is global audit standards (companies outside U.S)Public Company Accounting Oversight Board (PCAOB) develops Auditing Standards (AS). So, PCAOB auditing standard is mostly used for U.S. public companies.American Institute of Certified Public Accountants (AICPA) issues Generally Accepted Auditing Standards (GAAS). U.S. GAAS is used for U.S. non-public companies.Textbook pg 10GENERAL DEFINITION OF AUDITING:An audit is a systematic process of objectivity obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established criteria, and communicating the results to interested users.Systematic approach means that auditor is following a structured and detailed plan that is audit plan, which is constructed before conducting the audit.Objectively means that auditor is independent and fair in examining and evaluating audit evidence. What is audit evidence? Ya macem2, bisa financial reports, nota2, inventory, interview karyawan2, banyak.Obtains and evaluates evidence meaning that all the evidences gathered are being tested the reliability and sufficiency of the information contained. Jd bukti2 audit ini penting buat auditor karena ini menentukan tingkat kepedean auditor dalam memberikan keputusan opini audit apa itu unqualified, qualified, ato apaan. (Assertions itu artinya kyk tingkat kepedean, declaration, claim, statement, opinion)Ascertains the degree of correspondence between assertions and established criteria. Jd auditor do physical examination, confirmation, inspection, analytical procedures, inquiries of the client, recalculation, reperformance, and observation buat check audit evidence ini sesuai sm yg tercatat ga.Communicating the results to interested users is the goal. Audit opinion determines the credibility of a companys financial statement whether it really reflects the real condition or not. Jadi audit opinion itu penting buat investors, management, bank, dll.Textbook pg 11The objective, purpose, and characteristics of a financial statement audit:To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework.To report on the financial statements, and communicate as required by the ISAs, in accordance with the auditor’s findings.Textbook pg 15TYPES OF AUDITOR:Internal auditors: their job is to investigate and appraise the effectiveness of company operations for management. Large part of their work consists of operational audits and compliance audits. If internal auditors are involved in financial statement audits, external auditors are needed to review the work performed by the internal auditors to prevent bias audit performance. (jd internal auditor itu ga terlalu boleh nanganin financial statement audit soalny mereka bakal bias since mrk kerja buat company itu sndiri. Kalo operational sm compliance audit gpp pake internal).External auditors: kalo external mrk nanganin smua tipe audit (operational, compliance, sm financial statement). Mrk certified by a professional organization or a government agency.INI PENTING BANGET KYKNY GA TRLL DIJELASIN DI TEXTBOOK KALIANIni beda tiap audit opinion itu apa, later bakal explained in details trmsk cara bikin report di chap12 kalian. Okkkkk.