8 Audit process
The purpose of an external audit and its role are not well understood. You have been asked to write some material for inclusion in your firm's training materials dealing with these issues in the audit of large companies.
Required Draft an explanation dealing with the purpose of an external audit and its role in the audit of large companies, for the inclusion in your firm's training materials. The external audit process for the audit of large entities generally involves two or more recognisable stages. One stage involves understanding the business and risk assessment, determining the response to assessed risk, testing of controls and a limited amount of substantive procedures. This stage is sometimes known as the interim audit. Another stage involves further tests of controls and procedures and audit finalization procedures. This stage is sometimes known as the final audit.
Describe and explain the main audit procedures and processes that take place during the interim and final audit of a large entity.