Audit and Assurance
Presentation by Waleed
Presentation to Sir Abdul Ahad
Difference between Audit and
Assurance
Audit:
• Independently
examination of financial
statements
• Provides an opinion on
whether FS gives a true
and fair view
• Focuses on accuracy,
completeness, and
compliance with
standards
Assurance:
• Improves the quality and
reliability of
information
• Broader scope (can cover
non-financial data too)
• Provides confidence to
users, not always an
audit opinion
Advantages of Statutory Audit
1. Ensures true & fair financial reporting
2. Builds credibility and trust among
shareholders, banks, and regulators
3. Detects errors, frauds, and irregularities
4. Improves internal controls and operational
efficiency
5. Helps in tax compliance and adherence to legal
requirements
6. Facilitates better decision-making for
management
Types of Audit Procedures &
Obtaining Evidence
1. Inspection – Checking documents, records,
physical assets
2. Observation – Watching a process being
performed
3. Inquiry – Asking questions from
management/staff
4. Confirmation – Third-party verification
(banks, debtors, creditors)
5. Recalculation – Checking mathematical accuracy
6. Reperformance – Auditor independently redoing
a procedure
Considerations Before
Accepting an Audit
• Assess client integrity
• Evaluate auditor’s competence & resources
• Identify ethical threats (independence,
conflicts of interest)
• Consider engagement risks (industry risk,
financial stability)
• Check previous auditor communication (if any)
• Assess firm’s ability to comply with standards
Contents of an Audit
Engagement Letter
• Objective and scope of the audit
• Responsibilities of management
• Responsibilities of an auditor
• Applicable financial reporting framework
• Form and timing of reports and communication
• Access to records and staff
• Responsibility for preventing/detecting fraud
• Basis of fees and billing
Thank You