Audit pro 411

What is audit quality? Audit quality refers to matters that contribute to the likelihood that the auditor will: achieve the fundamental objective of obtaining reasonable assurance that the financial report as a whole is free of material misstatement; and ensure material deficiencies detected are addressed or communicated through the audit report. This includes appropriately challenging key accounting estimates and treatments that can materially affect the reported financial position and results.

What is Accounting ? Accounting has been hailed by many as the “language of business”. There are many quotations like “A pen is mightier than the sword but no match for the accountant” by Jonathan Glancey which tell us about the power and importance of accounting. The text book definition of accounting states that it includes recording, summarizing, reporting and analyzing financial data . Let us try and understand the components of accounting to understand what it really means: Recording The primary function of accounting is to make records of all the transactions that the firm enters into. Recognizing what qualifies as a transaction and making a record of the same is called bookkeeping. Bookkeeping is narrower in scope than accounting and concerns only the recording part. For the purpose of recording, accountants maintain a set of books. Their procedures are very systematic. Nowadays, computers have been deployed to automatically account for transactions as they happen. Summarizing