To understand the ideas of the auditing process, knowledge of terminology plays a very important role. In general, the auditing process involves key participants, such as the client, the auditor (including the principal auditor), and the auditee. Clinical audits compare current health practices with good practice guidelines. They help evaluate whether patients are receiving the best quality care and can lead to improvements. You have the option of doing an audit while you're in medical school.
Once you are in your Foundation training program, you must conduct at least one audit a year. The consulting firm's staff must be experts in auditing protocols and procedures. In addition, with extensive experience conducting internal audits for other companies, the consulting firm's experts should be able to quickly get up to date on your company's policies, procedures and operations. Paragraph 41 (c) of ISA (United Kingdom) 700 (revised in June 2001) allows the auditor to refer in his audit report to the location of the “Description of the auditor's responsibilities in connection with the auditing of financial statements” found on the FRC website. This page contains the current version of the “Description of the auditor's responsibilities in connection with the auditing of financial statements”.
The auditor's objectives are to obtain reasonable assurance as to whether the financial statements as a whole are free from material inaccuracies, whether due to fraud or error, and to issue an audit report that includes the auditor's opinion. A reasonable guarantee is a high level of security, but it does not guarantee that an audit carried out in accordance with International Auditing Standards (UK) (ISA (UK)) will always detect a material inaccuracy when it exists. Inaccuracies may be due to fraud or errors and are considered significant if, individually or aggregated, they can reasonably be expected to influence the economic decisions of users made on the basis of these financial statements. The auditor communicates with those responsible for corporate governance regarding, among other things, the planned scope and schedule of the audit and important findings of the audit, including any significant deficiencies in internal control that the auditor identifies during the audit.
In the case of publicly traded entities and public interest entities, the auditor also provides those responsible for governance with a statement stating that the auditor has complied with the relevant ethical requirements regarding independence, including the ethical standard of the FRC, and communicates to them all relationships and other matters that may reasonably be considered related to the auditor's independence and, where appropriate, to related guarantees. When the auditor is required to report on key auditing issues, based on matters communicated to those responsible for corporate governance, the auditor determines those issues that were of greatest importance in the auditing of the financial statements for the current period and, therefore, are the key auditing issues. The auditor describes these issues in the auditor's report, unless the law or regulation prevents public disclosure of the matter or when, in extremely rare circumstances, the auditor determines that a matter should not be reported in the auditor's report because it is reasonable to expect that the adverse consequences of doing so outweigh the public interest benefits of such communication. The auditor's report must contain a clear expression of opinion on the financial statements taken as a whole. An unqualified opinion is expressed when the auditor can conclude that the financial statements provide a true and fair picture 1 and comply in all important respects with the applicable financial reporting framework.
The auditor issues an adverse opinion when, after having obtained sufficient adequate auditing evidence, he concludes that inaccuracies, individual or aggregated, are important and are present in the financial statements. Under certain circumstances, an audit report includes a paragraph of emphasis to draw attention to a matter presented or disclosed in the financial statements that, in the auditor's opinion, is of such importance that it is fundamental to the understanding of the financial statements by users. A paragraph on the emphasis on the subject matter does not change the auditor's opinion. If the auditor deems it necessary to communicate a matter other than those presented or disclosed in the financial statements and which, in his opinion, is relevant for users to understand the audit, the auditor's responsibilities or the auditor's report, he will do so in a separate section of the auditor's report with the title “Other Matter” or other appropriate heading.
The auditor must read all financial and non-financial information (other information) included in the annual report and identify if the other information is materially inconsistent with the financial statements or with the auditor's knowledge obtained in the audit or if it otherwise appears to contain significant errors. If the auditor identifies significant inconsistencies or apparent material inaccuracies, he determines if there is a material incorrectness in the financial statements or a significant incorrectness of other information. When the auditor concludes that there is an uncorrected material inaccuracy in the rest of the information, he is obliged to report this in the auditor's report. The auditor may need to address in the auditor's report other legal and regulatory requirements related to the responsibilities of other auditors. This conclusion is only necessary with respect to financial statements that have been prepared in accordance with a fair (or true and fair) presentation framework (examples of this are the international financial reporting standards adopted by the generally accepted accounting practice of the European Union and the United Kingdom).Larger public and private sector organizations must have formal procedures for auditing and reporting on health and safety performance.
