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What an auditor checks
An audit is not a hunt for errors in every document. The auditor assesses the risks of material misstatement and tests the key areas.
The purpose of an audit
The auditor expresses an opinion on whether the financial statements are fairly presented. The work follows International Standards on Auditing (ISA), recognized in Russia. Audit regulation documents are published by the Ministry of Finance of Russia.
Understanding the business and risks
- company structure and key operations;
- accounting policies and how they are applied;
- areas where material misstatements are likely.
Internal control
The auditor assesses approvals, segregation of duties and data controls in the accounting system.
Balances and transactions
- cash and settlements with counterparties;
- inventories, fixed assets and their measurement;
- revenue, expenses and recognition in the correct period;
- taxes and provisions.
Going concern and subsequent events
The auditor analyzes whether the company can continue operating and considers significant events after the year end.