Audit

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The most general definition of an audit is an evaluation of a person, organization, system, process, project or product. Audits are performed to ascertain the validity and reliability of information, and also provide an assessment of a system's internal control. The goal of an audit is to express an opinion on the person/organization/system etc. under evaluation based on work done on a test basis. Due to practical constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits. In the case of financial audits, a set of financial statements are said to be true and fair when they are free of material misstatements - a concept influenced by both quantitative and qualitative factors.

Traditionally audits were mainly associated with gaining information about financial systems and the financial records of a company or a business (see financial audit). However recently auditing has begun to include other information about the system, such as information about environmental performance. As a result there are now professions that conduct environmental audits.

In financial accounting, an audit is an independent assessment of the fairness by which a company's financial statements are presented by its management. It is performed by competent, independent and objective person or persons, known as auditors or accountants, who then issue an Auditor's report on the results of the audit.

Such systems must adhere to generally accepted standards set by governing bodies that regulate businesses. It simply provides assurance for third parties or external users that such statements present 'fairly' a company's financial condition and results of operations.

1 Financial audit
2 Quality audits
3 Integrated audits
4 Types of auditors
5 Major auditing firms
6 Auditing firms around the world
7 See also
8 External links

[edit] Financial audit

Main article: Financial audit

[edit] Quality audits

Main article: Quality audit

Quality audits are performed to verify the effectiveness of a quality management system. This is part of a certification such as ISO 9001.

[edit] Integrated audits

In the US, audits of publicly-listed companies are governed by rules laid down by the Public Company Accounting Oversight Board (PCAOB). Such an audit is called an Integrated Audit, and auditors have the additional responsibilities of expressing opinions on management's assessment of the firm's internal control, and on the effectiveness of internal control over financial reporting based on their (the auditors') own assessment. These requirements are consistent with Section 404 of the 2002 Sarbanes-Oxley Act.

[edit] Types of auditors

There are two types of auditors:

Internal auditor- are employees of a company hired to assess and evaluate its system of internal control. To maintain independence, they present their reports directly to the Board of Directors or to Top Management. They provide functional operation to the concern. Internal Auditors are employees of the company so that they can easily find out the frauds and any mishappening.

External auditor are independent staff assigned by an auditing firm to assess and evaluate financial statements of their clients or to perform other agreed upon evaluations. Most external auditors are employed by accounting firms for annual engagements. They are called upon from the out side of the company.

[edit] Major auditing firms

The four largest accounting firms in the world are collectively referred to as the Big Four. They are as follows:

PricewaterhouseCoopers, also known as PwC
Ernst & Young, also known as E&Y
KPMG, formerly known as Klynveld Peat Marwick Goerdeler
Deloitte Touche Tohmatsu, also known as Deloitte

There are many other audit firms competing with the big four for major audit engagements. Competition has intensified in response to independence issues and other legislative requirements introduced as a consequence of the Arthur Andersen Scandal. In the US and Australia, these firms are referred to as "mid-tier". Some of these include: McGladrey & Pullen, PKF, Pitcher Partners, Johnson Lambert & Co. LLP, Beard Miller Company LLP (bmc), BDO Seidman, and UHY firm.

In the UK the medium sized firms are also referred to as mid-tier. Many of these firms are international and increasingly are competing for work against the Big Four, especially following the recent large auditing scandals.

[edit] Auditing firms around the world

While the four major audit firms listed above provide audit services to the largest corporations in America, audit firms around the world are also in partnership with the Big Four. Since corporations held offices in other parts of the world, they tend to be audited by affiliates of the Big Four to maintain consistency and uniformity in their application of auditing standards.

There are many different auditing firms across the United States that specialize in many industries from Telecommunications to Municipalities. One such organization that has expaned it's range to many clients is Curtis Blakely & Co., P.C. [1].

In 1977, Curtis and Rose Blakely founded Curtis Blakely & Co., P.C., CPAs with one bookkeeper and a secretary. Curtis and Rose brought honesty, integrity, and the highest accounting standards to their firm. These qualities helped them develop their firm philosophy of delivering to the client a high-quality accounting product at a fair price. From those humble beginnings, Curtis Blakely & Co., P.C., CPAs has grown to a firm comprised of approximately twenty-eight people.

Curtis Blakely began auditing telephone companies as early as 1959. What started with one telephone client in 1959 has grown to over twenty-eight telecommunication clients today. Curtis and Rose worked in those early days to develop a firm that offered a wide variety of services. During that time primary clients also included construction companies, cities, and water supply corporations.

In 1986, Curtis Blakely & Co., P.C., CPAs underwent its first peer review and received an unqualified report. At that time, the peer review program was a voluntary program encouraged by the American Institute of Certified Public Accountants. Curtis Blakely & Co., P.C., CPAs was the first accounting firm in Longview to participate in the program, and has continued to receive unqualified peer review reports since its first review.

Over the years, Curtis Blakely & Co., P.C., CPAs has evolved into an organization providing a wide range of accounting and tax services to clients in multiple industries. Our clients include those involved in telecommunication, water supply, retail and wholesale sales, food services, and non-profit organizations. In addition, we provide accounting and tax services to a wide variety of individuals, partnerships, corporations, trusts, and estates. Our firm includes personnel with expertise in the areas of business valuation, state tax applications, estate planning, and corporate reorganizations.

Today, Curtis Blakely & Co., P.C., CPAs is the largest accounting firm in Longview, Texas. Curtis Blakely & Co., P.C., CPAs is recognized as an industry leader, backed by a proud history of trusted client relationships.