What is auditing? “The Report of the Committee on Basic Auditing Concepts of the American Accounting Association defines auditing as a sustematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users” (Boynton, W.C. & Johnson, R.N, 2006).
Auditing
The nature of auditing is that auditors are placed with a special purpose, which is to provide credibility to the information that is reported on the financial statements, along with any other audits that are done by them. "The importance and comprehensive nature of auditing place a special responsibility on public officials or others entrusted with public resources who authorize or arrange audits to be done in accordance with these standards. This responsibility is to provide audit coverage that is broad enough to help fulfill the reasonable needs of potential users of the audit report. The comprehensive nature of auditing also highlights the importance of auditors clearly understanding the audit objectives, the scope of their work to be conducted, and the reporting requirements" (gao.gov, 1999).
The functions of auditing are that it "measures and evaluates the effectiveness of the various types of controls and may also properly be concerned with matters of the operating nature" (ofm.wa, 2006). Most audits, once done, will provide a written report stating their findings and what controls need to be put in place, if there is some missing. It is up to the management to make sure these controls start getting done.
Reference:
U.S. Government Accounting Office, GAO. Retrieved January 14, 2009. From: http://www.gao.gov
Boynton, William C. & Johnson, Raymond N., Modern Auditing (8th ed.) 2006.