Audit Standards of Financial Statements & Documents Required
Every company certainly realizes the importance of knowing the company’s business and financial conditions as clearly as possible. By knowing the financial condition, the company or business can evaluate the business strategy that they apply, and make it a benchmark in making strategic decisions that can bring the company to develop in a better direction.
To find out the financial condition, the company or business usually prepares financial reports prepared by its financial staff. Financial statements contain details of each financial transaction or activity carried out by the company within a certain period. The contents of the financial statements greatly affect the progress of the company. Therefore, the financial statements must go through an audit process so that the contents of the report are tested for liabilities.
This financial statement audit is an audit which includes gathering and evaluating report evidence. This financial statement audit is carried out by an external audit and is usually at the request of the client. Auditing standards are needed in conducting audits of financial statements. Audit standards are standards / rules / criteria set and approved by the Indonesian Institute of Certified Public Accountants (IAPI), covering 3 parts namely.
Section in Audit Standards
1. General Standards
General standards relating to the auditor’s requirements and the quality of work so that it is personal. This standard covers three parts including:
a. An audit must be carried out by someone or more who has adequate technical expertise and training as an auditor.
b. The auditor must maintain mentality of all matters relating to the engagement, independence.
c. Auditors are required to use their professional expertise in conducting audits and reporting carefully and thoroughly.
2. Field Work Standards
This standard consists of 3 (three) points including:
a. All audit work can be planned as well as possible and when using an assistant it must be supervised properly.
b. Not only pay attention to audit standards, adequate understanding of internal control is needed to plan the audit and determine the nature
c. Competent audit evidence must be obtained through inspection inspection, request for information, and confirmation as an adequate basis for being able to provide an opinion statement on the audited financial statements.
3. Reporting Standards
The reporting standard consists of 4 (four) items, including:
a. The audit report must state whether the financial statements have been prepared in accordance with generally accepted accounting principles.
b. The results of the auditor’s report must show consistency, if there is inconsistency in the application of accounting principles in the preparation of the current period’s financial statements with the application in the previous period.
c. Informative disclosures in financial statements must be considered adequate, unless stated otherwise in the auditor’s report.
d. The auditor’s report must contain a statement of opinion regarding the financial statements as a whole that such statements cannot be given.