How to Perform an External Audit-Accounting Supplemental-Program Stream

Video Transcript

"My name is Miranda Chook, a CPA. Generally accepted auditing standards prescribe the standards or guidelines for conducting an external audit of financial statements. And the standards actually start with the competence, independence and supervision of the audit. And then of course you get into the conduct of the audit and the test that are, test and procedures that are included. There could be tests of internal control as well as something called substances test. Now if test of controls actually provide error free results they may, that may indicate that substantive test can be substantially reduced in terms of extent or timing. Now if there are errors of course then the auditors drive this to evaluate the materiality of those errors and the pervasiveness of those errors. Finally the audit opinion or audit report is rendered and these can range from an unqualified opinion to something that is qualified as to the nature of the audit itself or the accounting that was actually found at the company."