Discuss The Types Of Audit Accounting Essay

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(i) Compliance audit - for the organization, compliance audit was viewed as a performance improvement tool as it helped organization to increase the standard of its environmental management through it raise a better understanding where how compares to specified criteria. In addition, in order to comply with environmental regulations, the management and staff of an organization will change into more conscious of and take more responsibility. There are several objectives with the compliance audit which are assess the compliance with organization's environmental legislation, monitor the effectiveness of management system by make better the environmental performance and raising organization's ability to repeatedly improve and minimize future potential debt through gain the company's knowledge and activities (Jabatan Alam Sekitar Malaysia , 2011). For example, an audit of a local housing authority may have to review in order to decide whether they have any discrimination happen during the housing applicants and also the ability of applicants to fulfill the financial and nonfinancial criteria.

(ii) Financial audit - financial audit is an audit of financial statement which is more accurately. It can be viewed as the verification of the financial statement of a legal company or a process of an entity's financial statements to give an idea that is intended to give the reasonable warranty that the statements are show fairly in all material respects according to the existing financial reporting framework is verify. For company, when their authorization, commitments, disbursement of funds and receipt are correctly and accurately recorded and reported, reviews accounting and financial transactions will be determine. In addition, financial audit will determine when there is appropriate process controls set up for the acquisition and use of resources or adequate controls over cash and other assets. Beside this, audit may be also conduct for taxation, legal, disclosure or other purpose. The examiner will check for accuracy and all the representation of financial activity. As an example, use of incorrect investment base in calculating rate base for the post 2010 plant investment and customer wrongly charge for failed development of regional transmission organization.

(iii) Operational audit - operational audit was viewed as a systematic check how the company operation process and management are functioning with the respect target. So that can ensure the efficiency and effectiveness of a company business operation. Therefore, the main part of an operational audit is the internal control reviews. Beside this, it will be determine when the most effective and efficient method to fulfill the unit's objectives and mission as it's objective is to assess the activities or operations of the company such as procurement, human resources services, cash handling and equipment inventories are conduct in a effective and efficient way in order to meet company objectives and goals. Moreover, the recommendation of operational audit to the company management is usually expect to make better the operation. For instance, ABC Employment Security Commission has an operation audit in November 2012 at their department. The directors need to ensure that the company operation within the authority which in term of regulation, federal and state law, management instruction, policies, and procedure as well as efficient. In this case, the audit was done by ABC Department's internal audit. The internal audit department has to report to the direction of executive and commission through the activity of the audit.

(iv) Forensic audit - forensic audit also call as a forensic accounting. This is one of the accounting methods to obtain and tracking of forensic fact, normally for investigation of unlawful and in the courts of law such as fraud and embezzlement and used to investigate the allegations or complaints about the serious wrongdoing that involved the significant assets or federal funds. In addition, forensic audit normally more intensive compare with the regular audits and usually carry out in a series of steps to determine when allegations can be substantiated and to identify the nature of any further work needed (Gilmore, 2008). Furthermore, it may require use of investigative skill as well as critical analyses, integrated with business experience and accounting knowledge. As an instance, be a forensic audit jobs in a private auditing company. The workers are hiring something when company expects fraud happen in their rank. So be an auditor need to find the information or records which is useful to bring in criminal to justice.

G) Explain the meaning of 'true and fair view'

A 'true and fair view' can be referred to the key of an audit opinion as given by an auditor. Normally, the law to form an opinion as to whether the accounts they audit show a true and fair view of the organizations affairs required an auditors of the published accounts of companies. Beside this, It also refer to that there are materially accurate of the financial statements under audit that can be used to make the informed decisions by user and no any errors or misstatements that will cause a user make an incorrect decision and render the statements useless. In addition, 'true' are viewed as a numerical accuracy (to within the bounds of materiality) while 'fair' are viewed as the method for the information is presented such as adequate disclosure. Therefore, a 'true and fair view' was viewed as a summary that saying the accounts are "fairly accurate".