The most general definition of an audit is an evaluation of a person, organization, system, process, project or product. Audits are performed to ascertain the validity and reliability of information, and also provide an assessment of a system's internal control. The term validity (also called logical truth, analytic truth, or necessary truth) as it occurs in Logic refers generally to a property of In Accounting and Organizational theory, Internal control is defined as a process effected by an organization's structure work and authority flows people and The goal of an audit is to the person/organization/system etc. under evaluation based on work done on a test basis. Due to practical constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits. In the case of financial audits, a set of financial statements are said to be true and fair when they are free of material misstatements - a concept influenced by both quantitative and qualitative factors. A financial audit, or more accurately an audit of financial statements, is the examination by an independent third party of the financial statements of a company

Traditionally audits were mainly associated with gaining information about financial systems and the financial records of a company or a business (see financial audit). A financial audit, or more accurately an audit of financial statements, is the examination by an independent third party of the financial statements of a company However recently auditing has begun to include other information about the system, such as information about environmental performance. As a result there are now professions that conduct environmental audits. Environmental audits are intended to quantify environmental performance and environmental position

In financial accounting, an audit is an independent assessment of the fairness by which a company's financial statements are presented by its management. Financial accountancy (or financial accounting) is the field of Accountancy concerned with the preparation of Financial statements for decision makers It is performed by competent, independent and objective person or persons, known as auditors or accountants, who then issue an auditor's report on the results of the audit. An accountant is a practitioner of Accountancy, which is the measurement disclosure or provision of assurance about financial information that helps managers investors The Auditor's report is a formal Opinion, or Disclaimer thereof issued by either an Internal auditor or an independent External auditor as a

Such systems must adhere to generally accepted standards set by governing bodies that regulate businesses. It simply provides assurance for third parties or external users that such statements present 'fairly' a company's financial condition and results of operations.

Contents 1 Quality audits 2 Integrated audits 3 Types of auditors 4 Major auditing firms 5 Auditing firms around the world 6 See also 7 External links

Quality audits

Main article: Quality audit

Quality audits are performed to verify the effectiveness of a quality management system. Quality audit is the process of systematic examination of a Quality system carried out by an internal or external quality auditor or an audit team. Quality Management System (QMS can be defined as a set of Policies, processes and procedures required for Planning and execution ( This is part of certifications such as ISO 9001. ISO 9000 is a family of standards for Quality management systems ISO 9000 is maintained by ISO the International Organization for Standardization and is

Integrated audits

In the US, audits of publicly-listed companies are governed by rules laid down by the Public Company Accounting Oversight Board (PCAOB). Such an audit is called an Integrated Audit, and auditors have the additional responsibilities of expressing opinions on management's assessment of the firm's internal control, and on the effectiveness of internal control over financial reporting based on their (the auditors') own assessment. These requirements are

Types of auditors

There are two types of auditors:

• Internal auditor are employees of a company hired to assess and evaluate its system of internal control. Internal auditing is a profession and activity involved in advising organizations regarding how to better achieve their objectives To maintain independence, they present their reports directly to the Board of Directors or to Top Management. They provide functional operation to the concern. Internal Auditors are employees of the company so that they can easily find out the frauds and any mishappening.

• External auditor are independent staff assigned by an auditing firm to assess and evaluate financial statements of their clients or to perform other agreed upon evaluations. An External auditor is an audit Professional who performs an audit on the Financial statements of a company, Government, Most external auditors are employed by accounting firms for annual engagements. They are called upon from the out side of the company.

Major auditing firms

The four largest accounting firms in the world are collectively referred to as the Big Four. The Big 4, sometimes written as the Big Four, are the four largest international Accountancy and Professional services firms which handle the vast majority They are as follows:

1. PricewaterhouseCoopers, also known as PwC
2. Ernst & Young, also known as E&Y
3. KPMG, formerly known as Klynveld Peat Marwick Goerdeler
4. Deloitte Touche Tohmatsu, also known as Deloitte

There are many other audit firms competing with the big four for major audit engagements. PricewaterhouseCoopers (or PwC is one of the world's largest Professional services firms Ernst & Young is one of the largest Professional services firms in the world and one of the Big Four auditors, along with PricewaterhouseCoopers (PwC, KPMG is one of the largest Professional services firms in the world Deloitte Touche Tohmatsu (also branded as Deloitte) is one of the largest Professional services firms in the world and one of the Big Four auditors, along Deloitte Touche Tohmatsu (also branded as Deloitte) is one of the largest Professional services firms in the world and one of the Big Four auditors, along Competition has intensified in response to independence issues and other legislative requirements introduced as a consequence of the Arthur Andersen Scandal. Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms among PricewaterhouseCoopers, Deloitte Touche In the US and Australia, these firms are referred to as "mid-tier". Some of these include: Grant Thornton LLP, (GT), McGladrey & Pullen, PKF, Pitcher Partners, Johnson Lambert & Co. PKF (Pannell Kerr Forster is a global network of accountancy firms LLP, Beard Miller Company LLP (bmc), BDO Seidman,DFK International, and UHY firm.

In the UK the medium sized firms are also referred to as mid-tier. Many of these firms are international and increasingly are competing for work against the Big Four, especially following the recent large auditing scandals. The Enron scandal was a financial scandal involving Enron Corporation Former ( NYSE ticker symbol ENE and its accounting firm Arthur Andersen

Auditing firms around the world

While the four major audit firms listed above provide audit services to the largest corporations in America, audit firms around the world are also in partnership with the Big Four. Since corporations held offices in other parts of the world, they tend to be audited by affiliates of the Big Four to maintain consistency and uniformity in their application of auditing standards.

See also

• Academic audit
• Auditor's report
• Single Audit
• Audit risk
• Clinical audit
• Computer security audit
• Conformity assessment audit (ISO, HACCP, JCAHCO)
• Environmental audit
• Financial audit (the oldest)
• Information technology audit
• Internal audit
• Performance audit
• Scientology auditing
• Software audit
• Telecommunication audit
• Audit Planning and Controls
• Benford's Law

External links

• National Information Assurance (IA) glossary
• Glossary of auditing terms
• IFRS List - The online community about IFRS/IAS and Auditing
• Article - Why Didn't Our Auditors Find the Fraud?
• IAS IFRS Services Italy

An audit is an educational term in the United States for the completion of a course of study for which no assessment is made or grade awarded The Auditor's report is a formal Opinion, or Disclaimer thereof issued by either an Internal auditor or an independent External auditor as a In the United States, the Single Audit, also known as the OMB A-133 audit, is a rigorous organization-wide Audit or examination of an entity that expends Audit risk is a term that is commonly applied in relation to the audit of the financial statements of an entity Clinical audit is the process formally introduced in 1993 into the United Kingdom 's National Health Service (NHS and is defined as "a quality A computer security audit is a manual or systematic measurable technical assessment of a system or application Conformity assessment is any activity to determine directly or indirectly that a process product or service meets relevant Standards and fulfills relevant requirements Environmental audits are intended to quantify environmental performance and environmental position A financial audit, or more accurately an audit of financial statements, is the examination by an independent third party of the financial statements of a company An information technology audit, or information systems audit, is an examination of the controls within an Information technology (IT Infrastructure. Internal auditing is a profession and activity involved in advising organizations regarding how to better achieve their objectives Performance audit refers to an examination of a program function operation or the management systems and procedures of a governmental or Non-profit entity to assess whether Auditing was developed by L Ron Hubbard, and is described by the Church of Scientology as "spiritual counseling which is the central practice of Dianetics In Telecommunications, the term audit has the following meanings To conduct an independent review and examination of System records and activities Benford's law, also called the first-digit law, states that in lists of numbers from many real-life sources of data the leading digit is distributed in a specific

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