Audit is a basically an examination and a review of the financial statement that have been prepared by the management at the end of the financial period. The primary function of an audit is to verify the accuracy and completeness of the accounts. Audit is performed by the auditors' in order to enhance the confidence of the business stakeholders. However, in a public company like Wal-Mart, auditors are appointed by the audit committee which is selected by the board of directors of the company. Then according to the following standards Wal-Mart conducts internal and external audit.
Generally Accepted Auditing Standards (GAAS)
The following is a summary of generally accepted auditing standards approved by the U.S. Institute of Chartered Accountants, as follows (Lee, 2009): General Standards 1 - Must be examined by a person with sufficient expertise and technical competence. 2 - References should retain the independence of mind in all matters relating to the audit. 3 - You should make references due professional care in carrying out the examination and preparation of the report. Standards Of Field Work
1 - There must be a sufficient planning, work planning and must be proper oversight of assistants, if any. 2 - There shall be extensive analyses to evaluate the internal control system used as the basis for the adoption, and to determine the extent of the resulting tests, which will be limited by the review. 3 - Auditor must obtain sufficient evidence and convincing documentary credit by examination, observation, inquiries and confirmations to be a reasonable basis for audit opinion with respect to the financial statements on the basis of examination. Standards for Reporting 1 - Auditor must report whether the financial statements prepared in accordance with generally accepted accounting principles. 2 - Auditor must report conditions that are ...