The audit methodology is based on three interrelated stages that allow you to conduct a high-level audit: planning, collecting and analyzing information that ensures the reliability of reporting and drawing up an auditor's report.
Planning
Planning is an important step in conducting an audit. It is at this stage that the specialist must determine the control strategy, create an audit program and assess the scope of control. The auditor should develop and document an overall plan, determine the materiality of the errors, and then proceed to direct verification. When drawing up the plan, it is important to consider such issues as the auditor's understanding of the business, understanding of the internal control system, identification of risks, timing, types and completeness of procedures, support, supervision and management, and other issues. The general plan should be very detailed so that it can be used to draw up an audit program - a detailed list of the content of the procedures carried out by the auditor.
The initial planning stage can include analytical procedures that help the professional understand the issues that matter to him, which will allow him to plan the work well. This can be a check of economic indicators for previous years, the identification of significant deviations, and so on. An important stage in the preparation of the general plan is the study of the accounting system and the assessment of the internal control system. This is possible thanks to the analysis of relevant documentation, interviews with management and other activities.
Collection and analysis of information
During the audit, the auditor should study and evaluate some aspects of the accounting system. These include accounting policy and its compliance with regulatory requirements, document management and organizational structure. It is also necessary to assess the place and role of computer information systems in the reporting process, critical areas of accounting, in which there is a high risk of errors, and the controls that are provided in some areas of the accounting system. It is important to test internal controls, which includes the control environment, risk assessment, monitoring of controls, and so on. The auditor will need to identify and assess the risks of gross misstatement, not only at the financial reporting level, but also at the assertion level for each class of transactions. The assessed level of risk will help to take into account the nature, scope and timing of further verification procedures.
Drawing up an auditor's report
The results of the audit carried out by the auditor are summarized on the basis of international audit standards. The auditor is responsible for expressing opinions and formulating the accuracy of the financial statements. Despite the fact that there are several types of audit (initiative, mandatory and special assignments), it is advisable to use a single form of audit report. It must be written in Russian, and the cost indicators must be expressed in rubles.
There are several basic elements of the auditor's report: name, addressee, information about the auditor, information about the audited entity, introduction, description of the scope of the audit, the auditor's opinion, the date of the auditor's report, and the auditor's signature. This document passes into the hands of the management of the audited entity. The auditor is responsible for forming an opinion on the reliability of the financial statements.
