Classification of external audit services within the framework of Egyptian auditing standards

External audit services are divided and classified according to the nature of the task performed, mainly divided into audits, limited examination, and assurance tasks.

Amer Ibrahim - • External audit and audit

The Egyptian Standards for Auditing focused on classifying the external audit service according to its purpose - in accordance with the decision of the Minister of Investment No. 166 of 2008 according to its latest amendments - which adopted the standards of audit, limited examination and other verification tasks.

Through this decision, the types of external audit services can be classified into

First: External Audit (Confirmation Process)

It is the customary and traditional audit services, which are governed by several standards, starting with the Egyptian Auditing Standard No. 200 and its appendices (the objective of the financial statement audit process and the general principles that govern it).

It is the work of the customary audit, which aims to issue the auditor for an impartial and objective opinion on the fairness and clarity of the financial reports subject to the audit work and the extent to which they express the financial position of the company in order to find a sufficient degree of confidence on the part of the users of these lists.

They can be classified into :

Review in terms of the extent of examination

Comprehensive review

Optional Review (Samples)

In terms of timing

Final review (at the end of the year)

Continuous review (periodic throughout the year)

In terms of scope of review

Full review (full examination of the material balances in the financial statements)

Partial review (limited to examining certain operations or balances in order to reach an opinion on them)

In terms of the extent of responsibility in implementation

Ordinary review (examination of financial statements and records to issue an opinion on them)

Revision for a specific purpose (it is the examination for the purpose of reaching specific facts to achieve a specific goal)

Second Limited Examination :

Egyptian Auditing Standard No. 2410 (Limited examination of the periodic financial statements of an entity performed by its auditor)

It is one of the external audit services that the auditor may be assigned to - and it is summarized in the auditor's limited examination of the client's periodic financial statements in order to reach conclusions that would reach an acceptable opinion that there are no significant and material distortions in the periodic financial statements.

Here, the auditor in charge of the limited examination process must be aware of the nature of the facility, its environment and internal control systems, as he is responsible for reviewing and approving the company's annual financial statements, and therefore the limited examination process is only an update of information and conclusions through inquiries and discussions with the company's financial department.

This type of limited examination depends on:

a. Inquiries .... Which is done with those in charge of the company's financial management

In. Analytical procedures for the financial statements of the periodic statements under examination

C. Any other measures that reduce the risk of distortions in the periodic financial statements.

It is worth mentioning ... The periodic financial statements are lists prepared and presented in accordance with the financial reporting framework and include either a set of condensed or complete financial statements and are prepared for a shorter period of the entity's fiscal year.

As a result of the limited examination depends on inquiries and analytical procedures in the first place. This leads to a difference in the objectives of the limited examination from the audit work that is conducted in accordance with the standards in the following points:

Third: Verification Tasks :

Egyptian Auditing Standard No. 3000 (Verification tasks other than reviewing or examining historical financial information)

The verification process is defined as .....

It is the process that enables the accountant to draw results whose goal is to increase the confidence of beneficiaries or users in light of the specific measures that enable him to do so.

When applying this framework, we find that there are two types of verification services:

Tasks of issuing appropriate verification reports (positive report)

And the tasks of issuing limited verification reports (negative report)

Here it should be clarified that :

Not all operations that are checked are performed frequently and therefore not covered by this framework.

The verification process may be part of a larger process and therefore the framework is only suitable for the verification part of the process.

There are processes that meet the definition but are not performed by it.

External audit services are divided and classified according to the nature of the task performed, mainly divided into audits, limited examination, and assurance tasks.

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