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What is Auditing?

Auditing has many definition, but in the business and accounting terminology it is called Financial Auditing. A financial auditing is an accounting process. Independent bodies called the auditors are used to examine an entities financial transactions and financial statements. Its major purpose is to accurately account a company’s financial transaction. The process is being made to ensure that the entity is trading fairly and in accordance with the Accounting Standards so as their issued financial statements will not be misleading for users.

Auditing is one board exam subject in the Philippine CPA board exam. The subject is not taken as a whole but it is split into two different board subjects which are the Auditing Problems and the Auditing Theory. Each is taken into account independently.

What are the topics in Auditing Problems?

Auditing Problem topics is comprise of Audit for Cash; Audit for Receivables; Audit for Inventories, Audit of Investments; Audit of PPE; Audit of Prepayments and Intangible Assets; Audit of Liabilities; Audit of Share Holders Equity; Audit of other Income Statement Items; Accounting Policies, Changes in Accounting Estimates and Error; and lastly Statement of Cash Flows.

What are the topics in Auditing Theory?

The topics included in Auditing theory are Auditing and Assurance Services; Standards, materiality and Risk; Audit Report; Legal Liability; Evidence; Audit Process; Internal Control; Completing the Audit; Compliance and Internal Auditing; Audit Sampling and the Code of Ethics.

Tips in Studying Auditing Theory:

• Read a book. By book it means, textbook and not merely a reviewer. It is better to read a text book because it more explained compared to a reviewer.
• Understand what you have read. If you have understand what you have read you will not be having a problem answering multiple choice questions even if how twisted the question is.
• Do not memorize. The problem when studying theories is that most people tend to memorize each question and answer. Memorizing can only be used in one exam but it will not be retained for other future exams.
• We cannot avoid feeling sleepy in studying theories, so if you feel sleepy leave your book for a moment and meditating towards your goal on what you would want to achieve. You can do this by simply stretching and walking a bit and not by lying in your bed because you will become sleepier.

There are lots of free auditing materials available online and maybe you would want to try answering this set of multiple choice questions about the Introduction of Auditing.

Meet geemiz

Geezelle Maningo - A Cebu based travel blogger and the other half of GeeMiz Travel blog. She has been traveling around the Philippines and Asia since 2010 with her husband. A casual trekker/hiker since 2017 and has been blogging since 2008. A digital marketer during workdays and a bookworm on lazy days - she co-founded Cebu Book Club.

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