What is Objective Integrity Detection? 10

The principle of integrity means that the content and procedures of accounting work must be complete; Accounting vouchers, accounting books, accounting statements and other accounting materials must be complete; The economic activities reflected in accounting should be the whole process of the entire economic activities; The management of accounting files must be in accordance with the requirements of accounting laws and regulations and must be complete. Article 1 of the "Accounting Law" stipulates the integrity of accounting work, accounting materials, and accounting books.

The principle of completeness, also known as the principle of adequacy, requires that the information disclosed can ensure that investors form a sufficient sense of investment judgment in terms of quantity and nature.

The audit objective derived from the integrity determination is that the transactions that have occurred have indeed been recorded. Occurrence and completeness both emphasize opposing concerns.

It means that the accounting transactions that occur in a specific accounting period are recorded in the relevant account books and listed in the accounting statements, and there are no omissions, concealment of economic operations and accounting matters, and no off-the-books assets.

Audit objectives can be divided into overarching objectives and specific objectives.

Overall objectives of the audit**

According to Article 25 of Chapter IV of the Chinese Certified Public Accountants Auditing Standard No. 1101 - General Objectives of Certified Public Accountants and Basic Requirements for Auditing Work (Revised on November 1, 2010), the overall objectives of certified public accountants are as follows:

a) obtain reasonable assurance as to whether the financial statements as a whole are free of material misstatement as a result of fraud or error to enable the certified public accountant to express an audit opinion as to whether the financial statements have been prepared in all material respects in accordance with the applicable basis for the preparation of financial reporting;

2) In accordance with the provisions of the auditing standards, issue an audit report on the financial statements based on the audit results, and communicate with the management and governance.

Audit Specific Objectives**

According to the record of the 2015 CPA textbook "Audit", the specific audit objective refers to the CPA to check whether each of the determinations contained in the financial statements (mainly including balance sheet, income statement, cash flow statement, and notes to accounting statements) provided by the audited entity is true. These include:

1. Audit objectives related to various transactions and events during the audited period.

1. Occurrence. That is, to check whether these transactions are actually happening.

2. Integrity. That is, to check whether the transactions that have already occurred have been concealed or omitted.

3. Accuracy. That is, to check whether the actual transaction is reflected in the correct amount.

4. Deadline. That is, check whether all the transactions in the current period are reflected in the current period, and whether the transactions reflected in the current period include other periods.

5. Classification. Whether various types of transactions are classified and reflected in the correct way, such as whether the income from fixed assets is listed as the main business income, etc.

2. Audit objectives related to the balance of the accounts at the end of the period.

1. Existence. That is, to check whether the assets and liabilities that have been reported are real.

2. Rights and Obligations. That is, to check whether the ownership of the reported assets belongs to the audited unit, and whether it is the obligation of the audited unit.

3. Integrity. That is, whether there is any concealment or omission of assets or liabilities.

4. Valuation and apportionment. That is, to check whether the real assets or liabilities, the amount is correct, and whether they are correctly amortized.

3. Audit objectives related to presentation and disclosure.

1. Occurrence and rights and obligations. Check whether the disclosed content is true and related to the audited entity.

2. Integrity. Check whether all the things that should be disclosed have been disclosed.

3. Classification and comprehensibility. Check whether the content of the disclosure is correctly classified and whether the expression is clear.

4. Accuracy and valuation. Check whether the wording of the content disclosed is accurate and the amount is appropriate.

Meaning: In a certain historical environment, the audit subject expects to achieve the situation or final result through audit practice activities.

Authenticity is existence.

Check whether the approval procedures for long-term loans are complete, and the completed audit objectives are: existence, i.e., authenticity.

The calculation and accounting of interest are examined, and the completed audit objectives are: valuation and apportionment

Once the CPA understands the determinations, it is easy to identify the specific audit objectives for each project and use them as a basis for assessing the risk of material misstatement and designing and implementing further audit procedures.

The audit objective refers to the purpose and requirements that the auditor expects to achieve through the audit activities, and it is a guide to guide the audit work. The audit objectives can be divided into two levels: the overall audit objectives and the audit specific objectives.

The audit objectives are a further concretization of the overall objectives of the audit. In order to achieve the overall audit objectives, auditors must review the various items and related information of the accounting statements and obtain the necessary audit evidence.

Audit objectives related to various types of transactions and matters.

1. Occurrence: The audit objective derived from the occurrence determination is that the recorded transactions are genuine. For example, if no sales transaction occurs, but a sale is recorded in the sales journal, the objective is violated.

The issue to be addressed by the occurrence determination is whether management has recorded in the financial statements those items that have not occurred, which is primarily related to the overvaluation of the components of the financial statements.

2. Integrity: The audit objective derived from the integrity determination is that the transactions that have occurred have indeed been recorded. For example, if a sales transaction occurs but is not recorded in the sales journal and general ledger, the objective is violated.

Occurrence and completeness both emphasize opposing concerns. The occurrence objective is for potential overvaluation, while the completeness objective is for undervalued transactions.

3. Accuracy: The audit objective deduced from the accuracy determination is that the recorded transactions are reflected in the correct amount. For example, this objective is violated if the quantity of the goods shipped does not match the quantity on the invoice, or if the wrong sale** is used in the invoice, or if the product or sum in the invoice is incorrect, or if the wrong amount is recorded in the sales journal.

4. Cut-off: The audit objective deduced from the cut-off determination is that the transactions close to the balance sheet date are recorded in the appropriate period. For example, if the current transaction is pushed to the next period, or if the next transaction mentions the current period, the cut-off target is violated.

5. Classification: The audit objective deduced from the classification is that the transactions recorded by the audited unit are appropriately classified. For example, if the cash sales are recorded as credit sales, and the income from operating fixed assets is recorded as operating income, it will lead to an error in the classification of transactions and violate the objectives of the classification.

The audit objectives include the overall objectives of the audit of the financial statements and the specific objectives of the identification level of the items in the financial statements.