bea2004 notes unit 1 - what is audit

BEA 2004 AUDITING 2007 Background Notes Unit 1 What is audit? The primary, but not entire, focus of this module is on what is conventionally known as financial audit and in particular external financial audit. This form of audit was defined by the 1APC in 1989 in its Exploratory Foreword to Auditing Standards as ‘the independent examination of, and expression of an opinion on, the financial statements of an enterprise’ and in SAS 100 Objectives and General Principles Governing an Audit of Financial Statements the APB noted that: ‘the objective of an audit of financial statements is to enable auditors to give an opinion on those financial statements taken as a whole and thereby to provide reasonable assurance that the financial statements give a true and fair view (where relevant) and have been prepared in accordance with relevant accounting or other requirements.’ Financial audit is not the only form of audit and more than ten years ago Power (1994) noted: ‘the word ‘audit’ is being used in the UK with growing frequency. In addition to financial audits there are now environmental audits, value for money audits, management audits, forensic audits, data audits, intellectual property audits, medical audits, teaching audits, technology audits, stress audits, democracy audits and many others besides.’ In some audits the audit takes the form of an activity designed to provide independent credibility to or to ‘attest’ a statement about conditions, ...