Discuss the differences between auditing large and small companies, and auditing public and non-public companies

Answer:

• First of all let us discuss differences between auditing large and small companies. Audit so small company encounter certain challenges that affect their audit strategy that are Accounting adjustment for prior period, Significant transactions with unaudited related parties. In large company we don’t see generally this type of adjustment. In small company there is unique demand for most experienced auditors to make important judgments about audit strategy. While in large company every year same process is followed there is no unique demand for large company

Now let us discuss, Audit of public and non-public companies. private companies make the same audit service choices as public companies  for the same reasons  despite being exempt from many financial reporting requirements

In the private compo nay there is a demand` of the audit by various part like, bankers, management, private equity firms and owners hoping to attract prospective buyer as against to this in the public company there is requirement by law. In the private company the  audits comes from a much wider set of agents . Difference between private company and public company is small because Management continues its very strong role in the auditor relationship

2

 Why transaction-related audit objectives are used to develop the audit program?

Answer:

Generally transaction-related audit objectives are used to develop the audit program is due to following reasons

Audit objective comers many things like Management responsibility like fairness in financial statement .Logical Presentation. Auditors responsibility includes Planning and performance of Audit. Providing reasonable assurance that financial statement are free from material misstatement. Finding internal control and weaknessses.Transaction relate audit objective set one by one transaction to complete the whole audit process so it is used in develop the audit program

3

Explain the effect on tests of controls and substantive tests of eliminating certain specific controls. Please provide detailed

Test of control  and sensitivity analysis includes enquiry and confirmation. Inspection like credit references or notes made by the credit controller of conversations. Observation of particular person like  credit controller at work and Recalculation and reperformance .By implementing these test auditor would realize the effectiveness puff the internal control of the of the organization or if it found that particular person g=have control over particular department then it  will be helpful to eliminating certain specific controls