Lesson 1 of 0
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1.4 Features of audits
The following are the key features of an audit:
- Independence: An audit must be performed by an independent auditor who is free from any conflict of interest or bias.
- Objectivity: The auditor must maintain a high level of objectivity and impartiality in the performance of the audit.
- Systematic: An audit is a systematic examination of an organization’s financial, operational, and compliance records and activities.
- Evidence-based: An audit is based on the examination of evidence, such as financial statements, supporting documents, and management representations.
- Risk-based: An audit is a risk-based process, where the auditor focuses on areas that are most susceptible to material misstatements.
- Professional skepticism: The auditor must exercise professional skepticism and maintain a questioning attitude throughout the audit.
- Reporting: The auditor must provide a written report, including an opinion on the financial statements, and any findings or recommendations for improvement.
- Regulation and oversight: Auditing is subject to regulation and oversight by professional bodies and government agencies to ensure its quality and independence.
- Continuous improvement: The auditing profession is constantly evolving and improving, and auditors are required to stay informed of changes in auditing standards and best practices.