The auditor is required to:
- Corroborate the record
- Evaluate and
- Form a conclusion on the adequacy of the client’s internal control system The internal control system consists of procedures that ensure that all the transactions, resources and liabilities are recorded correctly.
The main object of the review of both the internal control and accounting systems is have the evidence that the client among other things:
- Maintains adequate books of accounts and records
- Has a system in place of internal control over processing and recording of transactions to the extent that all transactions are recorded correctly both in principle and numerically
- The accounting records can adequately be relied upon to form a basis for preparing of financial statements.
It is important that the auditor vouches each and every transaction recorded in the books of accounts.