Ten Steps in Auditing

In: Business and Management

Submitted By Borden1017
Words 1963
Pages 8
Ten Steps In Auditing
Advanced Auditing 606M
Jeremy Borden

The purpose of this paper is to explain the purpose, goal, and/or outcome of each step in the audit process. The steps included in these pages are essential when conducting any audit of any company. Although specific audit procedures are different from one engagement to the next, the following steps are involved in every engagement.

The first step in the audit process for any engagement is to make contact with the potential client. The goal of this step is to obtain new audit business. This is often times is done through the submittal of a general proposal that includes details on the nature of services provided, the qualifications of the firm’s auditors, anticipated fees, and other pertinent information to persuade the client to choose the firm. If the potential client is a publicly held company, arrangements for the audit are made through the audit committee. The proposal and oral presentations are made to provide a basis for selection. If the potential client is a private company, a partnership, or a smaller company, arrangements are made through the owners, a partner, or an executive of the company. This initial contact will often lead to oral discussions, negotiations, and other fact-finding topics before a final formal proposal is written and the audit is accepted. The proposal will also include a mention of contacting the previous auditor of the potential client. This is important because the potential client will have to give consent to the previous auditor to discuss confidential information. This way all parties involved have full disclosure. The outcome of the initial contact is proceeding to the next step in the process, communicating with the predecessor auditor.

The second step in the audit process is communicating with the potential clients previous auditor. This is…...

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