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Principles when auditing financial statements
When auditing financial statements, auditors must adhere to several important principles to ensure that the audit process is accurate and reliable. These principles not only shape the audit process but also provide the basis for its transparency and independence. What principles should be followed when auditing financial statements? In this article, Siglaw would like to review some of the principles that need to be followed when auditing financial statements.
4 principles when auditing financial statements
There are four basic principles that auditors need to follow when auditing financial statements:
(1) Must comply with the law and accounting standards, avoid violating legal regulations
(2) The audited financial report must comply with audit principles: ensuring the independence of the audit unit, auditor, integrity, objectivity, prudence, and confidentiality of the auditor.
(3) Must be performed by units and auditors who are fully certified and meet qualification requirements as prescribed by law.
(4) The financial statements after being audited must clearly show the financial situation of the enterprise accurately and have legal value.
Must comply with the law, comply with accounting standards, avoid violating legal regulations
It is the responsibility of the audited entity to ensure that its activities are carried out under laws and regulations, including compliance with the provisions of laws and regulations concerning amounts and disclosures presented in the financial statements.
The audited financial report must comply with audit principles: ensuring the independence of the audit unit, auditor, integrity, objectivity, prudence, and confidentiality of the auditor.
These principles play an important role in ensuring quality and transparency in the audit process. Independence helps auditors or auditing companies perform their work and give opinions objectively without being influenced by external factors. This is an important factor to protect the transparency and reliability of financial reporting.
Objectivity is the ability to view any issue fairly and non-bias. Auditors need to rely on evidence and information to form an audit opinion. Objectivity ensures that the audit opinion is formed based on a comprehensive understanding and is not influenced by personal views. This enhances the transparency and fairness of the audit process.
Besides, security is also one of the important principles, ensuring that information during the audit process is protected and is not disclosed except in authorized circumstances. This ensures the integrity and security of audit information.
Complying with auditing ethics rules will bring many benefits as follows:
– Ensuring audits are carried out professionally and fairly between parties. This helps create confidence in the results of those audits.
– Implementing the code of ethics helps auditors remain independent and upright, limiting difficult and sensitive situations that may arise during the audit process.
– Compliance with the auditing code of ethics can help build and maintain trust between auditors and clients. Position your brand in the hearts of customers, create a difference, and compete in the market.
Must be performed by units and auditors who are fully certified and meet qualification requirements as prescribed by law.
Professional competency is the ability and in-depth understanding of the field of auditing that helps auditors perform audits effectively and accurately. Helps auditors always make considered decisions and warn their clients of risks.
Auditors must perform audit work according to professional standards specified in Vietnamese auditing standards, regulations of the Professional Association, and current legal regulations. However, to be able to perform consistently and maintain the proposed professional principles, auditors must always improve their professional knowledge and skills to be able to meet the requirements for education and training. training and experience in the audit profession; requirements for professional expertise as well as regulations on business management and administration apparatus.
In addition, auditors apply knowledge, skills, and professional experience in internal audit work and act prudently and under applicable professional and technical standards.
Audited financial statements must clearly show the financial situation of the enterprise accurately and completely, and have legal value.
Audited financial statements play an important role in providing information about a business’s financial situation to relevant parties, including shareholders, investors, banks, and regulatory agencies. , and other business partners. Below is an analysis of the importance and important factors that should be shown in the financial statements after the audit:
Financial statements after the audit need to accurately reflect the financial situation of the enterprise. Numbers and information must be thoroughly audited to ensure accuracy and reliability.
Information in financial reports needs to be presented in a transparent and easy-to-understand manner so that readers can grasp the financial situation quickly and accurately.
In addition, it is necessary to comply with accounting principles and standards in the process of preparing and presenting financial reports so that the audited financial statements are complete and have legal value.
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