What are the elements of an audit

The elements of an audit engagement is an important auditing concept, including the three parties related to the audit engagement, the financial statements, the basis of preparation of the financial statements, the audit evidence and the audit report.

1. tripartite relator: the certified public accountant, the management of the audited entity (responsible party), and the intended users of the financial statements, respectively.

2. Financial statements: in the audit of financial statements, the financial statements are the audit object and the important carrier of information.

3. Basis of preparation of financial statements: for listed entities in China, the basis of preparation of financial reports here can be understood as enterprise accounting standards.

4. Audit evidence: the certified public accountant in accordance with the enterprise accounting standards, combined with the actual situation of the audited entity, to determine whether the financial statements comply with the enterprise accounting standards, so as to obtain the financial statements of the absence of material misstatement of the audit evidence.

5. Audit report: CPAs in accordance with the code of ethics and auditing standards, the design and implementation of the necessary audit procedures, to obtain sufficient and appropriate audit evidence, the formation of audit conclusions, audit opinions, and the issuance of audit reports.