Difference:
1, independence is different.
Compared with the independent auditing standards commonly used in external auditing, their independence varies with different objectives and customers.
2. The audit objectives of the two are different.
The goal of external audit is often limited by laws and service contracts, while the purpose of internal audit is to evaluate and improve the effectiveness of risk management, control and corporate governance processes, and help enterprises achieve their goals.
3. Both focus on different fields.
The focus of external audit is specified by laws and contracts, and it mainly focuses on the quality and compliance of accounting information, that is, evaluating the legitimacy and fairness of financial statements. The main focus of internal audit is the legal compliance of economic activities, the realization of objectives, operational efficiency and so on.
The audit process of extended data can be roughly divided into the following stages.
I. Accepting business entrustment
An accounting firm shall prudently decide whether to accept or maintain a certain customer relationship and specific audit business according to the provisions of the professional standards. Before accepting the entrustment, a certified public accountant should have a preliminary understanding of the auditing business environment.
Including the business agreement, the characteristics of the audited object, the standards used, the needs of the expected users, the relevant characteristics of the responsible party and its environment, and other matters that may have a significant impact on the audit business, transactions, conditions and practice.
The main tasks in the stage of accepting business entrustment include: understanding and evaluating the auditability of the audited object; Decide whether to consider accepting the entrustment; Agree on the terms of the business agreement; Sign an audit engagement letter, etc.
Second, the planned audit work
A planned audit is very important. Poor planning will not only lead to the blind execution of audit procedures, but also reduce the audit risk to an acceptable low level without obtaining sufficient and appropriate audit evidence, which will affect the realization of audit objectives, waste limited audit resources, increase unnecessary audit costs and affect the efficiency of audit work.
Generally speaking, the planned audit work mainly includes: the preliminary business activities carried out at the beginning of the current audit business; Formulate the overall audit strategy; Formulate specific audit plans, etc. Planned audit is not an isolated stage of audit business, but a continuous and constantly revised process, which runs through the whole audit business.
Third, implement risk assessment procedures.
Auditing standards stipulate that certified public accountants must implement risk assessment procedures as the basis for assessing the risk of material misstatement in financial statements and identification. The so-called risk assessment procedure refers to the procedure implemented by certified public accountants to understand the audited entity and its environment and identify and evaluate the risk of material misstatement in financial statements.
Risk assessment procedure is a necessary procedure, and understanding the audited entity and its environment provides an important basis for certified public accountants to make professional judgments in many key links. Understanding the audited entity and its environment is a continuous and dynamic process of collecting, updating and analyzing information, which runs through the whole audit process.
Generally speaking, the main tasks of implementing risk assessment procedures include: understanding the audited entity and its environment; Identify and evaluate major misstatement risks at the level of financial statements and various transactions, account balances and presentation, including determining major misstatement risks that need special consideration (i.e. special risks) and major misstatement risks that cannot be handled only through substantive procedures.
Iv. implementation of control tests and substantive procedures
It is not enough for certified public accountants to carry out risk assessment procedures to provide sufficient and appropriate audit evidence for expressing audit opinions. Certified public accountants should also implement further audit procedures, including the implementation of control tests (when necessary or when deciding to test) and substantive procedures.
Therefore, after assessing the risk of material misstatement of financial statements, certified public accountants should use professional judgment to determine the overall response measures to the assessed risk of material misstatement of financial statements, and design and implement further audit procedures for the identified risk of material misstatement of financial statements, so as to reduce the audit risk to an acceptable low level.
Verb (abbreviation of verb) completes the audit work and prepares the audit report.
After completing the further audit procedures of all financial statements, certified public accountants should also do a good job in the audit completion stage in accordance with relevant auditing standards, make rational use of professional judgment, and form appropriate audit opinions based on all kinds of evidence obtained.
The main tasks of this stage are: auditing the opening balance, comparative data, later events and contingencies; Consider going concern and obtain management statement; Summarize the audit differences and submit them to the audited entity for adjustment or disclosure; Review audit working papers and financial statements; Communicate with management and governance; Evaluate audit evidence and form audit opinions; Prepare audit reports, etc.
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