There are many types of audits including financial audit, operational audit, statutory audit, compliance audit and so on. Here is the list of 14 Types of Audits and Level of Assurance: The external audit is referring to the audit firms that offer certain auditing services including Assurance Service, Consultant Service, Tax Consultant Service, Legal Service, Financial Advisory, and Risk Management Advisory. However, statutory audit refers to only auditing of the entity’s financial statements that required by local law.

For example, auditors found that there is no safe to keep cash overnight while performing the operational audit at the branch. Economy refers to acquiring resources with appropriate quality at a low cost. Activities may include an analysis of the contracts granted to contractors, prices paid, overhead costs allowed for reimbursement, change orders, and the timeliness of completion.

Among the four types of audit report, unqualified audit report is the report that auditors usually issue most of the time. Auditors usually state that “the financial statements do not give a true and fair view” or “the financial statements do not present fairly” in an adverse audit report. In this type of audit, auditors who are the tax officers are not appointed by the company. The intent is to locate and remedy control breaches, as well as to collect evidence in case charges are to be brought against someone. These audits are usually targeted at returns that result in excessively low tax payments, to see if an additional assessment can be made. An auditor’s main purpose is to help a company improve itself in various ways. Audit report is the report that auditors express an opinion on financial statements whether they faithfully present the company’s financial position, financial performance, and cash flows in accordance with the applicable financial reporting framework, such as … These four types of audit reports include: Unqualified audit report is the report auditors express their opinion that there is no material misstatement on financial statements. Auditors will also need to make sure that there is no conflict of interest between the audit team and the client management team. For example, a disclaimer of opinion audit report that auditors issue on financial statements of ABC Limited would look like below: Risk of Material Misstatement for Accounts Receivable, Risk of Material Misstatement for Inventory, Risk of Material Misstatement for Investments, Risk of Material Misstatement for Revenues, Risk of Material Misstatement for Tangible Asset, Auditors find that there is a material misstatement in accounts or balances of financial statements, or. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. For example, internal auditors may review the internal policy of keeping cash and comparing it to the actual practice at the branch. The intended result is an evaluation of operations, likely with recommendations for improvement. Some country requires an audit firm to follow its audit standards while some other countries have adopted the international standards and transform it to be local.

Forensic audit usually covers areas of fraud, thief, and other financial claims. Some external audit firms are also offering internal audit services. An investigative audit is an investigation of a specific area or individual when there is a suspicion of inappropriate or fraudulent activity. Auditors usually state that “we do not express an opinion on the financial statements” in the disclaimer of opinion audit report.

In this article, we will explain the main 14 types of audits being performed in the current audit industry or practices. Auditors cannot obtain sufficient appropriate evidence to ensure certain account or balance is free from material misstatement. The best example of external auditing services is the services that providing by these big four audit firm including KPMG, PWC, EY and Deloitte.

In this case, financial statements contain material misstatement which can be isolated to one part of financial statements.