AUDIT EVIDENCE

Audit evidence usually looks back to the information collected for reviewing the financial transactions of a company to their internal control practices and for the other essential factors that required for certification of their financial statements. The type and amount of the consideration auditing evidence varies significantly on the basis of the type of company being audited to the required scope of the audit. The audit evidence is important to be collected by an auditor during the process of his auditing work.

The first objective of every audit is to find the compliance of a company’s financial statements with the GAAP standards to the jurisdiction of entity. The publicly traded companies are usually had to present full audited financial statements to shareholders at regular intervals.

Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries and confirmation. First of all, inspection is the easiest method of obtain the audit evidence. It refers to checking all documents, records, and physical assets. The reliability of these documents and records depends upon the nature and effectiveness of internal control.

Moreover, observation is another important method of obtaining audit evidence. This method involves the auditor to look at some steps of procedure being exam by others. This method could be exemplified by the auditors’ presence at the clients’ physical stock count. Apart from that, inquiries and confirmation include looking about the info from a knowledgeable person inside or outside the company, and responding to every inquiry to substantiate information in the accounting records. These responses could provide the auditor with info which is not previously possessed by them or even with corroborative evidence.

Refers to Generally Accepted Audit Standards (GAAS), the third standard of field work requires auditor to seek competent evidentiary matter. The evidence must be competence and sufficiency, both of these determine the persuasiveness of evidence. There are some factors affecting competence. Audit evidence must be relevance to the audit objective. Besides, the information received from outside the entity and the evidence from a client whose internal controls are effective is more trustworthy. Other than that, data prepared by someone inside the organization will not be reliable than the data discovered by the auditor. Quality of the individuals that provide information will be an important too because we have to make sure that information received is trusted and reliable and the person who delivered the information is qualified. Also, degree of objective makes the evidence persuasive because objective evidence is more reliable than evidence that is subjective. Lastly, timeliness, not all the data is useful in that period of time, audit report must be submitted on time, if not then it is useless.

In conclusion, audit evidences are important because it used to reach the audit opinion about the company’s financial statement. An audit engagement is carried out an opinion to a third-party, who interested in the company such as banks and investors. They rely on the audit opinion to make investment decisions in relation to the company. They trust the audit opinion because auditor giving out an assurance and quality work.

BENEFITS OF AUDITING TO BUSINESS

According to Company Law 1965, each and every company (public or private) is compulsory to be audited. It is a process to a business as it goes through of an analysis to determine the business condition. Auditing will be performed once of a financial year by an internal or external auditor.

 Auditing helps to identify the business’s weaknesses in the accounting systems as some errors might occur. It suggest improvements to businesses to perform better in the future too.

Moreover, performing an audit can help to detect any fraudulent activities in the business. Some fraudulent activities that is run by the business might not be obvious to show sometimes but it can be easily found by performing an audit.

Other than the social gaining confident from the product or service of a particular company, having to know that the company’s audit report is being unqualified will help them build more trust and confident to the company as the company is being audited by an professional and independent auditor with GAAS (Generally Accepted Auditing Standard).

Furthermore, the most considerable thing to all the shareholders is the return and the condition of the company. By performing an audit, it can show a true and fair view to the company as to provide assurance to the shareholders about the figures in all the accounts.

Not just that, auditing can detect any risk in the company such as inherent risk, control risk, and detection risk. These risks reflects to the internal control of a company as it is the main core control of how the business is carried out. Hence, the company can correct the mistakes and perform better in the future.

            Performing an audit is a process that is mainly to provide security and assurance of the financial condition to the company in order to make decisions. Thus, the management can use this information to evaluate and measure the necessary to meet their objectives.

INTRODUCTION

➼ 𝐽𝑂𝐴𝑁𝑁𝐸 𝐶𝐻𝑂𝑂𝑁𝐺

            I was a grade D student in mathematics during my secondary school time. I did not have any idea of what was going on with the subject and my mind went blank when it came to mathematics exercises and examinations. I admired my friends who can do mathematics and I felt lost and useless of myself in the same time for not knowing how to do so. Not just that, I would still be lazy to learn to do or calculate even if I knew calculators exists.

         When I stepped into the first year of Form 4, I had to take accounting as it is a compulsory subject for me according to my PMR result. I was so bad at it. It felt like I was a baby learning how to walk all over again after forgetting how to do so. There are so many formats and calculation methods to learn and memorize. It is so frustrating and impatient to do accounting. However, I got to know accounting better as I practiced through many exercises.

            According to what I have learn so far, auditing is a procedure that every company must go through during the financial period. The auditor will review the financial statement that is prepared by the client and judge whether it is prepared accordingly to GAAP (Generally Accepted Accounting Principles) accounting standards. Therefore, an audit report will be prepared by the auditor on whether the client get qualified or unqualified opinion from the outcome of audit process.



➼ 𝑳𝑰𝑴 𝑲𝑨𝑯 𝑴𝑼𝑵

            My name is Lim Kah Mun from Diploma in Accountancy students. Why I’m choosing diploma in Accounting after my SPM graduated. In my opinion ‘account’ is very important to every company whatever small company or big company. Hence, I also can apply this to any company, in any field, industry and sector. On top of that, accounting is one of the best careers available today. Professional accountants are forever required in any business and the fields or professions that I can select from are vast. In other words, I have a lot of career selection to choose from.  

         What is audit? For me, auditing is getting someone who is independent to check something. In addition, the auditor must be independent and fair to treat every company, the account must be fair. Besides that, the audit objective states what will be analysed in the audit.


➼ 𝑹𝑨𝑰𝑵𝑵𝒀 𝑳𝑰𝑨𝑵

        I am interested to accounting since secondary school, because I know that learning account could bring a lot of benefits to my personality and my future. Based on my PMR result, accounting is my compulsory subject. I'm glad to take this subject because accounting give me a great direction for my future. I know that, accountant has a very high level of demand in the market because all organizations, they require the information and administrations of an accountant and bookkeeper, so there is no deficiency of work. Besides, accountant is a high paid job, which consider a quite well paying salary in Malaysia.For all the information and advice from my family and lecturer, account related job will be my first choices of working job in my future. 

            
       When I am a beginner of accounting in secondary school, I don’t know anything about auditing. Then in Diploma in Accountancy, I learnt about auditing. An auditor is to provide an independent opinion to shareholders on the true and fair view of the financial statements. After audit a company, auditor should prepare an audit report, which write the opinion of the entity. The report must write in standard format, which accordingly to Generally Accepted Auditing Standards (GAAS). The user may rely upon the report as evidence that a knowledgeable third party has investigated and rendered an opinion on the financial statements. An audit report that contains a clean opinion is required by many lenders before they will loan funds to a business. Therefore, audit is important to a business.      


➼ 𝑺𝑯𝑰𝑹𝑳𝑬𝒀 𝑻𝑬𝑶𝑾

       I’m Diploma in Accountancy student. When I in secondary school I know accounting is important and one of the harder subject in Form 4 and Form 5. I feel very lucky is when I started my form 4 account is my compulsory subject. Form that time I start to learn account. Account is very important in our future because every company also need accountant make sure a business is set up properly and can help company pays its utility bills on time and  prepare a company to handle upcoming expenses. So I choose Account is my Diploma subject.

    What is auditing? Audit is view on the information presented in the financial report. Auditor must be professional and independent to every company. Because they must be fair to every business company. 

➼ 𝑳𝑬𝑬 𝑷𝑼𝑰 𝑺𝑯𝑨𝑹𝑵

          After graduate in secondary school i did not start Diploma immediately, because i have no direction. I'm the one who never learn about the subject accounting during secondary school time, but why i will choosing Diploma In Accountancy as my new level education in my life. Actually i really don't know why maybe i thought accounting is something similar as mathematics because i love mathematics much in primary and secondary school time. When i start taking Diploma In Accountancy then only realize it is a horrible subject, because it has many of theory lesson not only calculation.

         In first semester, when the lesson start i realize the subject accounting are a super brain subject. There are a lot of format need to remember. Now we are taking a subject Auditing in our last semester. I have no idea with this subject, in my mind Auditing is a form to Audit the account of the firm. Auditor must make sure the financial statement was present in true and fair view and they are independent on anything.



➼ RACHEL YEAU TZE ROU

           In my family, started work as an auditor is one of my cousin and my sister was started to study accounting in secondary school since I was small. When I during my secondary school my mum starting to ask me what should I do after SPM and she started to tell me how good to be as an accountant and auditor. After my PMR, based on my result I can choose account class but I choose Geography, Art and "Perdagangan" class and I add one more subject which is account. In last 2 year in secondary school which is form 4 and 5, I went outside tuition and also study myself because that time in my school did not have any class for addition subject students. I am glad that I get "A-" in SPM even though some time I felt hard in accounting subject.
              
           I continue to choose to study account is because I decide to be a banker and because my family especially my mum was wishing me to study further in future. Study Diploma in Accountancy not only study account, we also learn some of the business subjects and the import is audit. Audit that we learn is the examination of the financial report of an organisation which is presented in the annual report by someone independent. Auditors maintain independence from management and directors so that tests and judgments are made objectively. Thus, audit is hard to study but our lecturer told us that be as an auditor is fun.