Video Library - External Audit and Audit Services

external audit and audit services. 

The effect of risk and materiality on the size of the documentary sample

The selection of the documentary sample in the audit is of importance to the auditor due to its impact on the volume of effort expended to express an opinion on the financial statements in light of the identification of audit risks and relative importance

Evidence of evidence in the external audit

The concept and characteristics of the evidence and the technical methods of assembling them

Planning the review process and evaluating the results

The planning stage is considered one of the most important stages affecting the achievement of the objectives of the external audit process and reaching a sound report on the results of the audit process

Risk Matrix in External Audit

Determining the degree of risk in the audit process would enable the external auditor to perform his role with the highest efficiency, at the lowest possible cost, and in the shortest time

Identifying Risks in the Planning Phase of the Review - Part 2

The risk in the external audit..is the degree of uncertainty of the auditor about the fairness of the financial statements when carrying out the audit process..or in other words, the possibility of expressing an incorrect opinion on the audited financial statements, due to the auditor’s failure to discover material errors that may It is on those lists that he expresses his opinion

Evaluate the results of the review process

Evaluating the results of the audit process.. It is the last stage of the external audit process, which reflects the opinion of the external auditor on the financial statements, through which a letter is sent to the management of the facility with the result of the audit process and what the auditor’s opinion has reached.

Examples of Operational Procedures in the External Auditor's Working Paper

The external auditor’s worksheet includes many detailed procedures to reach the final opinion on the item’s share – these procedures depend mainly on good planning for the audit process and identifying high-risk items to focus on – with the need for a large degree of experience with the auditor to carry out these procedures properly.

Item revision notes in the External Auditor's worksheet

The observations mentioned by the external auditor in the item review worksheet reflect the auditor’s opinion on the validity of this item and the resulting review notes on it and the extent of the importance of these observations in forming the final opinion and the auditor’s report in general

The concept of materiality in the planning stage of the review process, part one

Determining the relative importance in the planning process for the external audit process is considered as one of the most important pillars for the success of this process and for the auditor to express a sound opinion on the financial statements

External Auditor Working Paper

The concept of the working paper in the work of the external audit is that it is the tool that reflects the extent of the auditor’s commitment to exercise professional care in verifying the validity of the financial item subject of the audit process … and clarifying the executive

The concept of materiality in the planning stage of the review process, part two

Determining the relative importance in the planning process for the external audit process is considered as one of the most important pillars for the success of this process and for the auditor to express a sound opinion on the financial statements

Identifying Risks in the Planning Phase of the Review - Part 1

The importance of planning the audit process is to reach sufficient assurance about the financial statements at the lowest possible cost and to avoid misunderstanding with the client

General framework of the external review process

The external audit means resorting to an accounting and auditing expert from outside the institution to perform a professional examination and audit all accounting books and documents owned by the company.

Companies summon the external auditor to express his fair, impartial and expert opinion on the credibility of these documents and their consistency, discovering their errors, and showing the extent of their data inconsistencies.

This opinion must be fully explained in a final report recording his decision on the correctness of the financial statements and accounts.

Reports are the most important tasks of the external auditor. The auditor issues these reports to entrepreneurs and investors to ensure their investments’ success and their goals’ achievement.

This made the external auditor one of the most important pillars that business owners rely on in their work. Big companies depend heavily on external audits.

The volume of medium-sized companies’ operations ranges between 50 and 200 million pounds per year. These companies often did not register their investments in the stock exchange. The external auditor may encounter problems while applying the audit to medium-sized companies due to the company’s inconvenience with some external audit standards. So, we find that average companies do not benefit from external audits until after a significant time.

Sometimes, medium-sized companies are unaware of the proper accounting system and financial statements. For example, when a client applies for an external audit, we discover the absence of essential accounting books and others. Our role here is to organise and modify this system to fit the audit process with our team’s extensive experience and following international auditing standards.

To start the external audit process, contact us. We will start the review as soon as the required procedures are completed and after carefully studying your request to decide whether or not the request for an external audit is approved.
In the event of acceptance, the chartered accountant selected from our team will start implementing the stages of the external audit steps, which will begin with the planning stage.

Our team also considers many essential matters within the audit to ensure the accuracy and usefulness of the client’s company.
The stages of external audit differ from one company to another according to the type and nature of the process, such as the difference in the audit item, whether it is a budget item or an income statement item, and the different nature of this item and its risks.

Also, the external audit has many criteria that must be carefully studied, including the nature of the activity, the extent to which the external audit can be applied, as well as the experience of the chartered accountant in this activity.
All of these criteria and obstacles affect, in one way or another, the outcome of the audit report. A chartered accountant needs a lot of learning and practice to become a trusted external auditor for companies. We have achieved this through more than fifteen years of hard work and experience with the strongest team of the largest accounting office in Egypt and the Middle East, “Egyptian Certified Public Accountants”. 

External audit and audit services

Several companies suffer from cases of fraud and embezzlement that ultimately lead to the company’s failure and fall. Still, the successful company increases the dependence on external audit of its operations to ensure the accuracy and integrity of its financial statements and quick access to any fraud or unfair treatment cases.

The audits here are not limited to the company’s auditors. Still, the successful company should rely more on external audit to get more accurate reports than an internal audit and correctly assess its financial situation.

Hence, it is clear that external audit is one of the essential pillars of any company’s success, continued business and profits for as long as possible. We can define external audit in a simplified manner as follows:

خدمات المراجعة الخارجية والتدقيق | ECPA
تعريف المراجعة الخارجية | ECPA

Definition of external audit

An external audit is an accounting work carried out by an independent auditor who examines the company's records, books and accounting documents very accurately to assess financial information and ensure safe and error-free. In the end, the external auditor issues a report explaining his objective and impartial opinion on the extent of The authenticity of the company's financial statements.

Companies often assign this task to an accounting company or an expert in external audit. This is what we provide in "ECPA" through specialized experts who are recognized for honesty, experience, speed and efficiency of work.

Definition of external audit

An external audit is an accounting work carried out by an independent auditor who examines the company's records, books and accounting documents very accurately to assess financial information and ensure safe and error-free. In the end, the external auditor issues a report explaining his objective and impartial opinion on the extent of The authenticity of the company's financial statements.

Companies often assign this task to an accounting company or an expert in external audit. This is what we provide in "ECPA" through specialized experts who are recognized for honesty, experience, speed and efficiency of work.

تعريف المراجعة الخارجية | ECPA

External auditor

An independent and expert accountant who serve capital holders by giving them a firm and accurate opinion about the validity and integrity of their company's financial statements, detecting if they are free from errors and fraud or not? Within the limits of the lists and documents submitted to him.

This does not mean that the company can choose any accountant to carry out its external audit. But an expert accountant must be selected who has been certified by the competent accounting authorities and enjoys complete independence from the company.

He is appointed during a general assembly meeting of the company for a specified period only. He shall be fully responsible for everything mentioned in his external audit report.

أهمية المراجع الخارجي | ECPA

External auditor

An independent and expert accountant who serve capital holders by giving them a firm and accurate opinion about the validity and integrity of their company's financial statements, detecting if they are free from errors and fraud or not? Within the limits of the lists and documents submitted to him.

This does not mean that the company can choose any accountant to carry out its external audit. But an expert accountant must be selected who has been certified by the competent accounting authorities and enjoys complete independence from the company.

He is appointed during a general assembly meeting of the company for a specified period only. He shall be fully responsible for everything mentioned in his external audit report.

أهمية المراجع الخارجي | ECPA

Advisory services provided by the external auditor

In recent years, advisory services provided by external audit companies and offices have increased due to intense competition. Advisory services for external auditors include

External Audit Steps

The external audit process can be divided into seven main steps:

Preparing and planning an external audit program

The final stage of the review process is to supervise and control the external audit cycle and plan work performance. Responsibility is determined, and work is pointed to participating assistant auditors to start the audit process.

planning

When an external auditor is selected for the task, he performs a detailed program called "Audit Procedures and Tests" designed according to each client's circumstances. The auditor tries to study his client's activity and accounting system and set the appropriate external audit date. The audit may be initiated during or after the end of the fiscal year. After that, the auditor identifies the appropriate and competent accountants to help him perform that task.

Getting accurate information about the project.

The auditor looks for information about the nature of the company's business and structure taken from reliable sources. The auditor then examines the company's situation and has government decisions, and economic conditions affected the field of work provided by the company? The auditor also determines the accounting applications and programs appropriate for the company's activity and the extent of expected risks.

The auditor's understanding of company policies and laws

Every company owns a regulation that includes financial policies and laws according to which operations are conducted. The external auditor should carefully study this regulation and understand it well to help him understand the accounting and financial system.

The audit strategy committed by the external auditor

The external auditor chooses a specific plan to review and examine data and lists, and sometimes more than one strategy is required to complete the external audit. These strategies include tests to confirm the validity of balances and processes recorded by the company's internal control system. They may also rely on internal control reports and reduce verification tests without reviewing them.

Doing an analytical study.

All financial transactions are studied and compared to ensure their safety. This step is considered one of the proof evidence used by the external auditor. Suppose the external auditor finds manipulation or errors. In that case, he will search more for the source of the error and perform tests that achieve additional results for review and access to information correct.

Determining the amount of relative importance

The auditor is concerned with the main items of the financial statements. He determines the amount of relative importance using available factors and thus determines what report they will submit.

External audit

Capitalists need to know the correctness of what is recorded in their financial company's lists, which is the main reason why they resort to an external auditor who has no connection with the company and can examine thoroughly, skillfully and experienced.

An external audit helps to clarify the success of the company's management in performing its mission and the level of profits reached by the company, which makes investors decide to invest or separate from this company.

The external auditor also uses several documents for auditing, such as:

Financial systems and Regulations.

The general budget and all financial statements.

Certified copies of agreements and contracts made by the company with clients, employees or companies and performance contracts.

Company organizational chart.

Reports issued by the Internal Audit Department for the current and pre-audit period.

Any instructions or directives issued by management.

Minutes of the Executive Board, Board of Directors, Health Assembly and Administrative Committees.

Reports of the external audit cycle of previous years.

دور المراجعة الخارجية في تحسين جودة القوائم المالية | ECPA

The role of external audit in improving the quality of financial statements

Many studies related to the external audit have demonstrated its essential role in improving the quality of financial statements.

External audit reports give credibility and validity to lists and the complete and accurate picture of the data recorded on the lists.

This increases the confidence of business owners, investors and their obligations.

It also clarifies all the financial risks that threaten the company and ways to remedy them.

 

دور المراجعة الخارجية في تحسين جودة القوائم المالية | ECPA

The role of external audit in improving the quality of financial statements

Many studies related to the external audit have demonstrated its essential role in improving the quality of financial statements.

External audit reports give credibility and validity to lists and the complete and accurate picture of the data recorded on the lists.

This increases the confidence of business owners, investors and their obligations.

It also clarifies all the financial risks that threaten the company and ways to remedy them.

 

Factors affecting the quality of the external audit

  • The auditor’s capabilities, knowledge, and experience in auditing, whether it is an individual, office, or company.
  • The excellent reputation of the auditor. A good reputation is gained after working faithfully for years so that the auditor will gain a reputation and a well-known business name. A good reputation also depends on the quality of the service.
  • The auditor’s amount of services to the client, especially with the increasing number of audit companies, and the more external auditor services, the more specific the quality of the external audit is.
  • The period of dealing between the company and the auditor. The higher that period, the more auditors understand its business and the greater their ability to detect errors and financial fraud.
  • External auditor’s pay. Increasing or reducing income may affect the integrity and quality of the audit.
  • The company’s field of work. The ideal auditor studies the company’s area well and then applies a plan that suits the field.

The extent to which the auditor adheres to international auditing standards and laws. It is considered the most influential factor in quality

External Audit Standards

In 1972, the American Institute of Accountants issued a set of general standards called GAAS External Audit Standards, as follows:

  • The audit is carried out by an individual or group of trained, highly qualified and highly skilled individuals who have been internationally accredited as auditors.
  • The auditor must be familiar with the industry in which they will work and be aware of technological means within the company.
  • An external audit course needs a lot of accuracy, focus and examination more than once to ensure that what will be recorded in the reports is correct.
  • Auditors have fairness and impartiality in thinking and auditing.
  • Distribution of work, determination of responsibility and continuous supervision of the audit process.
  • Determine the timing of the external audit and tests to be used.
  • Obtaining the necessary proof of audit evidence and ensuring its quality and adequacy.
  • When issuing the final report, it is necessary to illustrate whether the financial statements comply with international accounting standards or not.
  • The report contains the auditor’s opinion on the lists and records the reasons for abstaining if they refrain from expressing an opinion.

External audit and audit services in Egyptian chartered accountants

After knowing what an external audit is and what advantages an external auditor should have, you may be confused and wonder where to find auditors to all those required specifications. Still, I recommend “ECPA” to you.

We have everything you need to start external auditing of your company. We have many qualifications for this task and seek to provide the best external audit services in the Arab world.

ECPA is one of the best external auditing companies in the Middle East. Our consultants have extensive experience in many general fields with most companies. We have gained hundreds of clients during our years during which we have provided many services such as:

  • An integrated team of accountants, auditors and advisors are registered with the Audit Oversight Authority and certified by several official and national bodies.
  • Quarterly and periodic reviews and regular reporting on the period.
  • Final financial reviews for the year.
  • Provide adequate review reports that include all recommendations, meaningful suggestions and thoughtful observations.
  • Prepare letters and recommendations to management on points of weakness and how to enhance work effectiveness and internal control.
  • We offer external audit programs for all types of companies, institutions and government bodies.
  • We do periodic visits throughout the year.
  • We offer different types of audits depending on the type and needs of the business.
  • We comply with all international standards such as ISSAI and others.
  • We have the advantage of teamwork and communicating with many of your company leaders to make it successful.
  • We give you explicit recommendations about your career structure and help you exploit your human resources.
  • Our experts and consultants express an accurate and definite opinion about your financial statements derived from past and current experiences of many companies similar to your field.
  • Our consultants provide opinions on the internal control system, financial management and strengths and weaknesses and make recommendations to improve them.

Our first goal is to bring your company to safety, make good use of all your financial and human resources and achieve profits that satisfy you. Our experience has been gained during many years of successful work. We promise to continue to work at our best to make your company successful.
We would be happy to be one of our regular clients. Feel free to contact us now.