External audit is conducted by entities to get an independent third-party view or assurance on the financial position and performance of the entity. External audit at Virtual Accountants LLC is performed with an objective to provide reasonable assurance to the stakeholders based on the evidence gathered by the engagement team at the stages of planning, execution, and finalization of the engagement. Auditors are required to apply International Standards on Auditing (ISA’s) issued by the International Accounting and Auditing Standard Board (IAASB) along with the pronouncements and regulatory guidance provided by the local standard setting bodies and authorities from time to time.
At Virtual Accountants LLC (VA), our audit methodology or approach is risk based which means that the extent of procedures required to be applied depends on the category and extent of risk to which the entity is exposed. We apply Test of Controls (TOC’s) at the preliminary stages of the engagement and derive the timing and extent of Substantive procedures from the results of TOC’s applied. The equation is inversely proportional i-e. The higher the controls the lower the risk and the lower the substantive testing. This methodology implies that the Risk factor is of paramount importance to derive the whole engagement and controls play a pivotal role in mitigating the risks to which the entities are exposed.
Risks to which the entities are exposed depends on different factors ranging from external factors (Political, Economic, Social, Technological, Environmental and Legal) to Internal factors (non-systematic risk). Substantive testing applied by us comprises Analytical Procedures (AP’s) and Test of Details (TOC’s). The conclusion drawn always reflects the evidence gathered and is always supported by the guidance extracted from ISA’s, local laws and regulations and international practices. Our findings, forming part of the deliverables issued by us, are agreed at adequate stages with the higher as well as lower management of the entity. We consider value addition as one of the important aspects of the engagement and always strive to provide it to our esteemed clients within the boundaries of our professional standards and international practices.