AUDITING

Auditing 1. Definition Systematic process to obtain and evaluate the evidence whether the transaction is in accordance with the systems and procedures established by the company management. After the audit it will show there was cheating or not in the prerusahaan. 2. Accountants Examination Type Viewed from the types of tests done, accountant examination classified in 3 types, namely: a. Inspection Reports Financial (financial statement audit) Examination of financial statements intended to assess the fairness of the financial statements presented on the basis of clients accepted accounting principles. b. Inspection Compliance (Compliance Audit) Examination of financial activities or operating activities for the purpose of determining compliance with certain conditions or rules. c. Operations Inspection (operational audits) The examination of the operational activities of the company or organization with the goals, assess performance, identify improvement opportunities separately, make recommendations for the development or further action. 3. 3 Kinds of Auditing Standards a. General Standards (General Standard) Auditors must be neutral and independent, working carefully and cautiously. b. Standard Ground (Standard of Filework) In the examination must be obtained evidence sufficient and competent. c. Standard Reports (Standard of Report) Each report must be presented according to GAAP. 4. Understanding Management Asersi Asersi management is the management representation component financial statements, records, and run the system. Contents Asersi Management 1. Existence or occurrence (presence and occasions) 2. Right and Obligation (rights and obligations) 3. Completeness (Completeness) 4. Valuation and Allocation (Assessment and Allocation) 5. Presentation and disclosure (Presentation and Disclosure) Some of the reasons companies need to audit: 1. If the company wants to go public, it is necessary in the audit. 2. if the company wants to make a loan to the bank. 3. Trust companies will be more secure. Differences Auditing and Accounting Auditing is a process to evaluate information and make conclusions comparing between facts and criteria. Whereas, Accounting is a process of producing data and information in the form of financial statements.