Auditing Essay Example | Topics and Well Written Essays - 2000 words - 9

Auditing - canvas ExampleThe accountants ensure that this system has all components and that it functions efficiently. This paper will study risk-based auditing and assess the objectives and elements of internal tone down system while making reference to Emerald Fitness Studios.Risk-based auditing is a review whereby the attendee concentrates on the notional areas of a business (Gray, & Manson, 2011). The auditor uses more resources to assess the risky areas more than the non-risky areas of a business. This form of auditing takes shoot for in three stages that include comprehending of an system of ruless environment and processes, identifying risks and their impacts, and then concluding on those risks.The commencement ceremony stage of risk-based auditing involves understanding the environment of a business. The environment includes the daily activities and processes that take place in the organization (Ricchiute, 2003) for example, selling is a process that takes place in an organization on a daily basis. The auditor studies this activity from when a customer orders a product to the time that client receives that good and pays for it. In the slipperiness of Emerald Fitness Studios, the auditor should spend the day understanding the activities that the accountant, technicians, instructors, and the manager undertake. This means that the auditor has to spend virtually evenings in the office to relate with the accountants duties because the accountant works at night at the back office.The second stage of risk-based assessment involves identifying risks and their impacts to the organizations records and going concern (Ricchiute, 2003). This is because all organizations occupy in a setting that is filled with uncertainties. The statutory auditor of EFS should identify the uncertainties that the organization faces for example, the organization faces compliance, operational, and fiscal uncertainties. The statutory accountant should then determine the effects of the occurrence of these risks on the