Audit Documentation

Documentation refers to working papers kept by the auditor as regards audit planning, procedures performed, information and explanations obtained from client and conclusions drawn from the work performed.

Objectives of Documentation:
1: Assist in planning and performance of audit
2: Assist in supervision and review of audit work
3: Record the audit evidence resulting from the audit work performed to support the auditor's opinion , including representation that the examination was conducted in accordance with the International standards on auditing…!

Risk Assessment

Risk analysis is the process of defining and analyzing the dangers to individuals, businesses and government agencies caused by potential natural and human-caused adverse and unwanted events. In IT, a risk analysis report can be used to align technology-related objectives with a company's business objectives. A risk analysis report can be either quantitative or qualitative.

In quantitative risk analysis, an attempt is made to numerically determine the probabilities of various adverse events and the likely extent of the losses if a particular event takes place.

Qualitative risk analysis, which is used more often, does not involve numerical probabilities or predictions of loss. Instead, the qualitative method involves defining the various threats, determining the extent of vulnerabilities and devising countermeasures should an attack occur.

Objectives of having an audit:

The primary objective of having an audit is to enable the auditor to form and express a professional and independent opinion on whether the financial statements give a true and fair view of the financial position of the company and of its profit and loss for the period under review.

Other objectives are;

i) To ensure that the financial statements comply with any relevant statuary requirements, e.g. Companies Ordinances.

ii) To detect fraud and error in accounting records.

iii) To provide advice to client for improvements to financial systems and controls with in the business.

iv) To prevent fraud and error and improve the efficiency of operations.

Finance Lease

IAS 17 provides for capitalization of leases where the lease transfers substantially all of the risks and rewards incidents to the ownership of the property to the lessee. In such cases, the lessee records the lease as an assets and a corresponding liability. The lease treats the transactions will treat his investment “lease payments receivable” instead of “Leased asset”.

Risks include the losses due to idle capacity or obsolescence. Rewards mean the benefits associated with the ownership of property. For example profitable operation over the realization of the residual value.

The criteria to determine when the risks and rewards are transferred have been set out in paragraphs 8 and9of the IAS 17.

What risk's Mean:

Risk is the potential that a chosen action or activity (including the choice of inaction) will lead to a loss (an undesirable outcome). The notion implies that a choice having an influence on the outcome exists (or existed). Potential losses themselves may also be called "risks". Almost any human endeavour carries some risk, but some are much more risky then others.

What Audit Means:

The word audit has two meanings. The first is the security audit, whereby a consulting firm comes in and validates a companies security profile. This is similar to how accounting firms review a company's books. The second term is infosec specific, and means an "auditing" subsystem that monitors actions within the system. For example, it may keep a record of everyone who logs onto a system. Such a record is known as an audit trail.