6 Phases of the Audit Process
Aug 16, 2017 Vipul Mittal, CPA
It is extremely important to properly understand the audit process.
I have divided the audit process in 6 phases.
The first phase in the audit of financial statements is engagement acceptance. So, in this stage the auditor performs various procedures and decides whether to accept the engagement or not. The next phase in the auditing process is to plan the audit. Now planning an audit is important so that the auditor may perform it in an effective manner. Planning an audit involves establishing the overall audit strategy and developing an audit plan. The third phase in an audit relates to assessing the risk of material misstatement. So, in the third phase, the auditor performs risk assessment procedures to obtain an understanding of the entity and its environment and in the process of obtaining this understanding the auditor assesses risks of material misstatement. Now in the fourth phase, the auditor obtains sufficient appropriate audit evidence regarding the assessed risks of material misstatement. In the fifth phase, the auditor evaluates the audit evidence obtained. And in the last phase, the audittor forms an opinion based on the evaluation of the audit evidences.