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Knowing the Definition of Audit, Types, and Stages of implementation

Audit or examination in a broad sense means an evaluation of an organization, system, process, or product. Audit is carried out by competent, objective and impartial parties, called auditors. The purpose of the audit is to verify that the subject of the audit has been completed or running in accordance with standards, regulations, and practices that have been approved and accepted.

In the business world, we are also familiar with the term financial statement audits which are usually carried out by public accountants to assess how fair or how feasible the presentation of these financial statements is made by the company with reference to generally accepted accounting principles.

Types of Financial Audit Opinions
a. Unqualified Opinion
Is the opinion given by the auditor without any objections to the financial summary presented by management. This form of report is used if there are the following circumstances:

- The audit evidence needed has been collected sufficiently and the auditor has carried out his duties in such a way that he can ensure the fieldwork has been adhered to.

- Has followed general agreed upon standards.

- Financial reports audited are presented in accordance with accounting principles that are generally applicable in Indonesia and are consistently determined in previous reports. Similarly, sufficient explanations have been included in the footnotes and other parts of the financial statements.

- There is no significant material uncertainties regarding future developments that cannot be predicted in advance or satisfactorily solved.

b. Unqualified Opinion Opinions (Qualified Opinion)
Is the opinion given by the auditor with certain objections to one of the estimates recorded in the financial statements, but the objection does not materially affect the financial summary presented by management. Matters that affect the appearance of fair opinions with exceptions are:

- There is insufficient competent evidence or restrictions on the scope of the audit that are material but do not affect the overall financial statements.

- The auditor believes that the financial statements contain deviations from generally accepted accounting principles that have material impacts but do not affect the overall financial statements. The deviation can be in the form of inadequate disclosure, or changes in accounting principles.


c. Disclaimer Opinion
It is the refusal to give an opinion on the financial summary presented by management due to the limitation of the extent of the examination or the existence of uncertainty regarding the number of certain estimates.

d. Unqualified Opinion
It is the opinion given by the auditor who states that he does not agree to the financial summary presented by the management, because the auditor feels truly convinced that the financial summary is truly inappropriate.



Stages of Audit Opinion
Before the auditor gives an opinion (opinion), they must carry out the audit stages. The audit stages according to Arens et al (2008) are as follows:

a. Planning and declaration of the audit approach.

b. Testing of controls and transactions.

c. Implementation of analytical procedures and detailed testing of balances.

d. Completion and issuance of audit reports.


From some of the explanations above we can conclude, that an audit process will be related to the financial statements of a company. To obtain a satisfactory and feasible audit result, a company must consider the process of recording and presenting financial statements that are good and in accordance with the use of accounting received in general.

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