Audit. Theoretical foundations of auditing (lecture notes)

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Audit. Theoretical foundations of auditing (lecture notes)

Lecture notes, cheat sheets

Directory / Lecture notes, cheat sheets

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Table of contents (expand)

Accepted abbreviations and abbreviations
Theoretical foundations of auditing. Prerequisites for the emergence of audit and its place in the control system in the Russian Federation (Control in a market economy. Prerequisites for the emergence and development of audit. Development of audit in Russia)
Regulation of auditing activities in the Russian Federation (The system of regulation of auditing activities. The concept of auditing. Legal norms of auditing. Goals, objectives and general principles of auditing. Ethics of the auditor)
Types of audit and conditions for carrying out audit activities (Types of audit. Mandatory audit. Audit-related services. Independence of auditors, audit organizations and individual auditors. Internal audit. Certification and licensing of audit activities. Quality control of audit organizations and individual auditors)
Standards in auditing activities (Basic principles of auditing standards. International auditing standards. Rules (standards) of auditing in the Russian Federation. In-house auditing standards)
Organization of audit (Stages of an audit. Audit planning. Overall audit plan. Audit program. Audit contract. Examination and evaluation of accounting and internal control systems during the audit. Applicability of the going concern assumption. Use of the work of an expert)
Audit risk and its relationship with materiality and audit sampling (Audit risk and its assessment. Assessment of materiality (materiality) in an audit. Audit sampling. The concept of affiliates in an audit)
Audit evidence: features of obtaining and reflecting in working documentation (Audit evidence. Documentation of the audit. Verification of compliance with the requirements of regulations. Actions of the auditor when errors and dishonesty are identified. Analytical procedures in auditing. Types and features of application. Features of the audit of estimated values. Audit in the conditions of computer data processing)
The final stage of the audit (Informing management about the results of the audit. Auditor's report. Date of signing of the audit report and reflection in it of events that occurred after the date of preparation and presentation of financial statements. Auditor confidentiality)
Audit methodology. Audit of accounting policies (Goals and objectives of the audit of accounting policies. Changes in accounting policies. Testing of individual provisions of accounting policies)
Audit of cash transactions (Goals and objectives of the audit of cash transactions. Program for checking cash transactions and testing the control system. Organization of the working stage of the audit. Checking the execution of primary documents. Checking registers and reporting forms. Features of computerized accounting of cash transactions. Checking the correctness, timeliness and completeness of cash receipts funds. Inventory of the cash register. Checking compliance with the cash balance limit in the cash register. Audit of collected amounts of money. Checking compliance with the procedure for using cash registers. Audit of cash documents in the cash register. Responsibility of the management of the audited entity for organizing the accounting of cash transactions)
Audit of current and other bank accounts. Audit goals and objectives (Audit of transactions on a current account. Checking the documentation of transactions on bank accounts. Checking the legality of writing off funds from a current account. Checking transactions on foreign currency accounts. Audit of transactions on other bank accounts)
Audit of fixed assets and intangible assets (Goals and objectives of the audit of fixed assets and intangible assets. Assessment of the accounting and internal control system. Plan and program for the audit of fixed assets and intangible assets. Methods for obtaining audit evidence. Acquisition of fixed assets. Leasing of fixed assets. Acquisition of equipment requiring installation. Modernization fixed assets. Reserve for repairs of fixed assets. Depreciation of fixed assets. Retirement of fixed assets. Acquisition of intangible assets. Depreciation of intangible assets. Audit procedures)
Audit of inventories (Goals and composition of an audit of inventories and accounting procedures. Criteria for obtaining audit evidence during an audit of inventories. Stages of collecting audit evidence. Methods for obtaining audit evidence. Planning an audit of inventories. Audit of the correctness of accounting for materials. Features of an audit in an organization accounting of inventories at accounting prices. Acquisition of inventories, the cost of which is expressed in foreign currency. Material costs. Transfer of raw materials for processing. Accounting for goods. Audit of production and sale of finished products. Inventory of inventories. Audit of reporting forms)
Audit of financial investments (Prerequisites for verification. Concept and classification of financial investments. Formation of initial cost. Audit of loans. Audit of bills. Audit of shares. Audit of contributions to the authorized capital of other organizations. Audit of information on financial investments in reporting)
Audit of expenses and income of an organization (Audit of expenses. Audit of work in progress accounting. Audit of settlements with customers and the procedure for determining revenue. Completed stages of work. Audit of financial results)
Audit of contractual relations (Purchase and sale agreements. Construction contracts. Donation agreements. Agency agreement. Agreements for research and development work. Loan agreements. Surety agreements)
Audit of payroll calculations (Goals and objectives of the audit of wage calculations. Preparation of working documentation for the audit. Methods for obtaining audit evidence. Planning the scope of the audit. Accrual and payment of wages. Deductions from wages. Audit of wage payments. Providing leave. Unified social tax, pension contributions fund and insurance fund. Payment of benefits for temporary disability. Dismissal of employees. Audit of other issues regarding accruals and payments to the organization’s personnel)
Audit of settlements with accountable persons (Goals and objectives of the audit of settlements with accountable persons. Audit of accounting of settlements with accountable persons. Payment for business trips)
Audit of authorized capital and settlements with founders (Goals and objectives of the audit of the authorized capital. Audit program of the authorized (share) capital. The influence of the organizational and legal form on the responsibility of the founders. Basic legislative aspects of regulating the formation of the authorized (share) capital. Issue of shares. Audit of settlements with founders. Payment of dividends)
Audit of income tax calculations (Goals and objectives of the audit. Recommendations on the organization and methodology for verifying income tax expenses and obligations to the budget at various stages of the audit. Risk assessment. Determination of permissible error (level of materiality). Analysis of accounting policies. Generalization and assessment of audit results. Classification of violations by income tax. Documentation of audit results)
Literature

Section I. THEORETICAL BASIS OF AUDIT

Topic 1. PREREQUISITES FOR AUDIT AND ITS PLACE IN THE CONTROL SYSTEM IN THE RUSSIAN FEDERATION

1.1. Control in a market economy

In the Russian Federation, the following structure of regulatory authorities has developed:

▪ state control and budgetary bodies that exercise control over the receipt and expenditure of funds from budgets of all levels;

▪ departmental control and audit services that control the financial and economic activities of subordinate enterprises and organizations;

▪ internal control services organized directly at enterprises (audit commission, internal audit service, inventory commissions, etc.);

▪ audit firms and auditors carrying out inspections and providing other audit services on contractual terms with economic entities.

Audit, acting as a method of implementing non-departmental independent financial control, does not replace state financial control, however, its main subjects are, first of all, commercial enterprises and organizations that are not included in the system of ministries and departments available in the country and for this reason are not covered by departmental control.

The economic reform has led to a change in the dominant form of ownership, which is increasingly passing into the hands of private entrepreneurs and non-state economic entities. Accordingly, this causes a significant narrowing of the scope of state financial control and the need for a commensurate pace of reforms in the organization of new ways inherent in market relations to streamline the financial activities of non-state enterprises and organizations, the historically developed form of which is considered independent audit. Practice has shown that state financial control bodies and independent auditors, audit firms are by no means competitors, but on the contrary, a qualified and conscientious audit can be a significant help in the work of state financial control bodies and have a significant positive impact on improving the efficiency of their work, on the completeness and quality performance of their functions and tasks assigned to them.

In accordance with the Law on Auditing Activities, an audit does not replace state control over the reliability of financial (accounting) statements carried out by authorized state authorities, in particular the Accounts Chamber of the Russian Federation (Article 1). At the same time, the Law on Auditing Activities does not prevent their cooperation, and in some cases implies it. First of all, this is expressed in a clear definition of the list of conditions when a mandatory independent audit is carried out. This list includes credit organizations, state non-budgetary funds, state unitary enterprises.

In recent years, there has been a connection of audit organizations to the verification of the financial statements of state unitary enterprises. At the same time, theoretically, verification of the reliability of the financial statements of these structures (and related services) can be implemented in at least three ways: with the help of audit organizations, through audits and in a combined way (for example, on the basis of an annual mandatory audit with periodic - say, every three year - audits that significantly use the results of audits).

Most Russian economists distinguish the following differences when comparing audit and revision.

1.2. Prerequisites for the emergence and development of audit

England is considered the historical birthplace of auditing, where, in connection with the powerful development of market relations, a series of laws on companies were issued in 1844, according to which their Boards were obliged to invite a special person at least once a year to check the accounts and report to shareholders. In Edinburgh (1854), an institute arose that united accountants and auditors. The latter set as their goal an examination of financial statements with the expression of an opinion on their objectivity, thus taking upon themselves a certain share of responsibility in the event of possible losses for clients. In 1862, a law regulating auditing was adopted in England, and later laws on compulsory auditing came into force in other countries (for example, in France in 1867). In 1880 the Institute of Chartered Accountants was founded in England and Wales. Currently, in England, auditors are any specialists in the field of monitoring the reliability of financial statements, including those working in government agencies.

In Germany, in 1870, an addition to the law on joint-stock companies obliged the supervisory boards of these companies to check the main reporting forms and report on the results of the check at general meetings of shareholders, which laid the legislative foundation for the emergence of an audit. In 1932, the Institute of Auditors was established in Germany, which existed until 1941. After the end of World War II, the Institute of Auditors was formed in Düsseldorf, which in 1954 was renamed the Institute of Auditors of Germany, which currently includes more than 6000 auditors and 700 auditors. organizations.

Until the beginning of the 1917th century. an independent audit in the United States was based on the English model, which provides for detailed studies of balance sheet data. The first official regulation on auditing in the United States was published in 1937 and was devoted to the "audit of balance sheets". Legislatively, the audit in the United States has been approved since XNUMX, and two years later its standardization began.

Since the beginning of the XX century. audits and forensic examination of audit firms are becoming commonplace in economically developed countries.

The need for auditor services arose in connection with:

▪ with the need to provide high-quality information for making decisions on investment and cooperation;

▪ eliminating biased presentation of information by the enterprise to interested users;

▪ the need to obtain special knowledge to verify information due to the complexity of accounting and reporting;

▪ lack of information users having the necessary access to it to assess its quality.

Given the historical features of the development of audit, we can distinguish the following stages.

1. Until the end of the 1940s. The audit mainly consisted in checking the documentation confirming the movement of cash transactions, as well as their correct grouping in the financial statements. This audit can be called confirmatory.

2. After 1949, independent auditors began to pay more attention to internal control issues in companies, believing that with an effective internal control system, the likelihood of errors would be negligible, and financial reports would be more complete and accurate. Auditing firms have become more involved in consulting activities than directly auditing. Such an audit is called a system-oriented audit.

3. The third stage of audit development is focused on the possible risk when conducting audits or when consulting; at the same time, the audit, which, based on the conditions of the client's business, is carried out selectively (basically, the audit is carried out where the risk of error or fraud can be maximum) is called risk-based.

1.3. Development of audit in Russia

The Encyclopedic Dictionary of Brockhaus and Efron says that "in Russia the title of auditor was introduced by Peter I", and also that "by its nature, the position of an auditor combines the features of the positions of a clerk, secretary and prosecutor." The German model of building an audit was borrowed. However, during this period of time there was no internal need for the emergence and development of audit, and introduced by directive, it did not receive development and gradually lost its original purpose.

In 1889, an attempt was made to create an institution of auditors, but this would have been possible if there were trained personnel and social needs, and in Russia for this period there was not a sufficient number of qualified accountants. In addition, accountants were afraid of exams. Also, everyone demanded permission for membership in the institute and a license to work on the basis of either a diploma from an educational institution or work experience, in addition, requirements were put forward for auditors to comply with moral ethics. Attempts to create an audit institution in Russia were made as early as 1912 and 1928, but they all turned out to be unrealized.

The question of the need for audit in modern Russia arose from the beginning of market transformations. The first audit firms in Russia appeared in 1987, often formed with the participation of foreign capital. Many of them operate to this day and are among the largest audit firms and associations. The need for their appearance was caused by the most powerful development of foreign trade relations. To expand trade, capital was required, and in the conditions of the instability of Russia's monetary policy and galloping inflation, this was possible only with the involvement of foreign capital. His involvement required guarantees of return, and, consequently, an independent assessment of the activities of entrepreneurial structures. For the Russian Federation, the prerequisite for the emergence of an audit is also the need for a reliable assessment of property (primarily fixed assets) in terms of inflation and bringing its value in line with the market. The usual way to obtain reliable information is to conduct an independent audit. Thus, the need for audit has become an objective reality.

The first draft law on auditing activities was developed in 1992, but as a result of the political crisis in Russia it was not adopted. By Decree of the President of the Russian Federation of December 22.12.1993, 2263 No. 1987, the Temporary Rules for Auditing Activities in the Russian Federation were adopted. This is the first legislative document regulating auditing activities in Russia, it acted as a law, but even its name “Temporary Rules” emphasized that this was a document of a transitional period, it was assumed that this document would be temporary and would not last long, but in fact these Rules existed for almost eight years without amendments or changes. Prior to this, in the period from 1993 to XNUMX, auditing in Russia was in its infancy without a legislative framework.

The law regulating the activities of audit firms appeared on August 7, 2001 ("On Auditing").

The development and formation of audit in Russia has gone through several stages.

The first stage (1987-1993) was characterized, on the one hand, by the directive nature of the creation of audit organizations (1987 - the creation of the first audit organization "Interaudit"), on the other hand, by the spontaneous nature of the emergence of audit activity (training, disorderly issuance of the first certificates and licenses in the period 1990-1993).

The second stage (December 1993 before the adoption of the Law on Auditing - August 2001) can be characterized as the period of formation of the Russian audit, during which the Provisional Rules and the first rules (standards) of audit in the Russian Federation, developed by the Central Attestation licensed audit commission (CALAC) of the Ministry of Finance of Russia (37 rules (standards) of audit activity were developed and approved, as well as an audit methodology, which formed the methodological basis of the Russian audit), and a number of other documents.

During this period, active work began on attestation of auditors and licensing of audit activities, audit public associations and audit firms were created, work began on conducting mandatory audits and providing audit-related services. For the period 1994-2001. CALAC of the Ministry of Finance of Russia issued 23 licenses to licensees (including 600 audit organizations and 14 individual auditors). The number of valid licenses was about 700, including 8900 for general audit. During the same period, the CALAC of the Ministry of Finance of Russia approved for the issuance of almost 8900 auditor qualification certificates. A working structure of auditors and audit firms was formed.

The third stage of audit activity in Russia began after the adoption of the Audit Law. Its adoption confirmed the final formation of audit in Russia, made it possible to adopt a number of legal acts to regulate audit activities, to take a step towards integrating Russian audit into the international audit system.

Currently, the most pressing issues in auditing are the quality of its implementation and the related problems of appropriate training of audit personnel. The changes to the law “On Auditing Activities” are aimed at a fundamentally new mechanism for certifying professional auditors for Russia; their adoption will mark the beginning of a new, fourth stage of auditing in Russia.

Authors: Erofeeva V.A., Piskunov V.A., Bityukova T.A.

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