DENETİM - Deneme Sınavı - 3

E is related to auditor not business company.

Collection of evidence is not a shortcoming of SMEs in terms of ICS.

There may be conflict of interest between the users of the financial statements and the company managers
responsible for the preparation of the financial statements.

The benefits of independent audit can be listed as follows;
1. Provides correct flow of information to management.
2. Helps the management to make predictions and analyses regarding the financial statements and to
make healthy future decisions.

3. Indicates whether the financial statements
reflect the truth.
4. Helps business management and employees
to prevent cheating.

The concept of audit is confused with various concepts such as Control, Inspection and Revision.
Before defining the concept of audit, let’s define the concepts that lead to this confusion.
“Control is the beginning of the audit or the activity that precedes the audit. The measures taken to
achieve the objectives are a control activity.” Certain measures are taken to make sure that something turns
out as desired or to achieve a certain goal.

The subject of independent audit is financial statements and footnotes prepared by the company.

There are three important elements to be noted
in this definition. The first of these is that the
independent audit is based on predetermined
criteria. These criteria are Generally Accepted
Accounting Principles and Concepts (GAAP) and
Turkey Accounting Standards (TAS), according to
which the auditors will evaluate the information.

a. Types of Audit by Reason
The types of audit are divided into two according
to the reasons for their execution; compulsory
audit and optional audit.

Compulsory Audit is also known as Legal Audit

Internal auditors Internal auditors are the auditors who are included in the organization chart of the
organization they are affiliated with and operate directly under the board of directors or under the general
manager.

If we examine the institutions that are
authorized in the development and publication
of auditing standards, quality control standards
and code of ethics in Turkey and in the World;
IFAC (International Federation of Accountants) is
authorized in the world, KGK (Public Oversight,
Accounting and Auditing Standards Authority) is
authorized in Turkey.

IFAC’s strategic actions are grouped under three strategic
objectives (integrity, expertise, transparency) and
leverage IFAC’s unique position.

The work of the international, independent standard-setting boards supports the global economy and
financial markets by producing high-quality, global standards for audit and assurance, professional ethics,
public sector financial reporting, and professional skills and competencies.

In order to ensure audit to be qualified in Turkey, the KGK signed a copyright agreement
with International Federation of Accountants (IFAC) in 2013.

Auditing standards are the measure of the quality of the auditor’s audit performance.

Generally accepted auditing standards (GAAS) are a set of systematic guidelines used by auditors when
conducting audits on companies’ financial records.

General standards address the important qualifications of the auditor should possess.

Unmodified opinion : 

The opinion expressed by the auditor when the auditor concludes that
the financial statements are prepared fairly, in all
material respects, in accordance with the applicable
financial reporting framework and conformity and
accordance with generally accepted accounting principles (GAAP)

The Fundamental Principles
A professional accountant shall comply with each of the fundamental principles. The fundamental
principles of ethics establish the standard of behavior expected of a professional accountant. These
fundamental principles are:

• Integrity
• Objectivity
• Professional Competence and Due Care
• Confidentiality
• Professional Behavior

Integrity: Professional accountants must be
honest and straightforward during their work
in all professional and business relationships at
all times.