2008 | OriginalPaper | Buchkapitel
Nature and Content of Audits
Erschienen in: Internal Audit Handbook
Verlag: Springer Berlin Heidelberg
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• During audits, an independent party compares the existing condition to predetermined criteria (such as US-GAAP, or the policies and procedures of the organization).
• Audits serve two important control functions. Firstly, they are detective control mechanisms by which auditors identify and investigate variances or deviations from predetermined standards. Secondly, they are used as preventive control mechnisms because the expectation of an audit should deter individuals from engaging in fraudulent financial reporting or making careless errors.
• In the course of their evaluation, auditors identify business risks and evaluate the effectiveness and efficiency of the control systems designed to avoid, reduce or eliminate those risks. Auditors should also be aware of the risk of fraudulent activities.
• The primary goal of auditing is to serve the company by providing an independent and objective evaluation of the organization’s adherence to operational, financial and compliance policies, guidelines and regulations.
• Likewise, audits are performed to protect the interests of third parties, such as investors and creditors.