Types of Audit according to the Nature of Assertion

Bases of Comparison

Brief Description

Frequency

Cause of the need

for the audit

Focus

Financial Statement Audit

Operational Audit

Objective examination of
Financial Statements

A systematic review of an
organizations activities, or
of its segments, in relation
to its set objectives

Compliance Audit
Examination conducted to
determine the following or
adherence to criteria, standards,
or rules established by an
authoritative body

Periodically

Regularly

Periodically

Continuous improvement
of operations

Operation of Law
or Contract

Existence of conflict of
interests between user and
preparer
of financial statement

Financial statements
of business entities

Reports on

Fairness of preparation of
financial statements

Reports to

Public, third parties,

management

Who can perform

Special consideration
Most similar to
End product
Auditors
responsibility to
prevent fraud & error
Auditors
responsibility to
detect fraud & error

Economy and efficiency of

the use of scarce
organizations resources;
performance appraisal;
protection of assets; appraisal
control
Assessment of the
achievement of
company objectives
Management,
whether middle or top level

Adherence to regulations of an
influential external entity

Following of provisions and

interpretations of Law or
Contract
Third parties,
regulatory agencies

CPA External auditor

Individual with adequate,

appropriate experience

Individual with adequate,

appropriate experience, BIR
Examiner, External auditor

PFRS

Management directives
and company policies

Applicable laws covering entity

operations and financial
reporting

Internal

External, Government

Management Report

Independent Auditors Report

None

Supporting management
function

None

None, except when negligent

of duties and standards, and
when there is any
responsibility, only reasonable
assurance can be afforded

Supporting management
function, thus higher than
that of external auditor, same
as that of an internal auditor

None, except when negligent of

duties and standards, or when
required by law

Compliance
Independent Auditors Report