Audit overview — terminology you'll need
Before you touch any screen: a 5-minute primer on what an audit produces, who's involved, and the eight key terms that appear repeatedly throughout this manual.
What an audit firm actually delivers
An external audit produces one signed document: the Auditor's Report. That single document is the firm's professional opinion that the client's financial statements give a "true and fair view" of the company's financial position and performance. Everything else — workpapers, AJEs, sample tests, sign-off chains — is the evidence that supports the opinion.
Here's what physically lands in the client's hands at the end of an engagement:
3-5 pages. Opens with the firm's letterhead. Ends with the engagement-partner signature.
SFP, SPL, SCF, SOCIE — four IFRS-compliant statements with prior-year comparatives.
Twenty-four notes explaining each FS line + accounting policies + judgement areas.
And what the firm retains internally (never goes to the client) — the audit-evidence file, locked into a SHA-256 ZIP and kept for 7 years:
- The 12 workpapers (A-100 through L-100) with all 79 procedures ticked, evidence attached, sign-offs recorded
- The Adjusting Journal Entries register
- The Adjusted Trial Balance
- The disclosure compliance checklist
- The complete audit trail (who did what, when, with what reasoning)
- The signed Auditor's Report (a copy)
The 8 terms you must know
If you understand these eight, the rest of the manual reads naturally.
The client's complete list of every general-ledger account with its closing balance — Debit or Credit. Σ Debits must equal Σ Credits. The client gives this to you in CSV or Excel; you import it. This is your starting point.
A structured electronic file documenting your audit work for one specific area (Cash, Receivables, PPE, etc.). Each workpaper has a lead schedule (the numbers you're auditing), a procedures list (what you did to test them), evidence attachments, sign-offs, and a conclusion. AuditPro Suite ships with 12 standard workpapers labelled A-100 through L-100.
One specific test you perform during fieldwork. Examples: "Inspect bank statement and reconcile to GL", "Sample 30 receivables > OMR 5,000 and confirm directly with the customer", "Recompute depreciation per fixed-asset register". Each procedure references an ISA standard.
The threshold below which a misstatement is considered immaterial. Standard auto-calc: 1% of revenue, 0.5% of total assets, 5% of profit before tax, 1% of equity — pick the lowest. Per ISA 320. If a misstatement exceeds materiality, you must adjust it or qualify your opinion.
A correction you propose to fix a misstatement. Standard double-entry format: Debit one account, Credit another. Per ISA 450, AJEs come in 4 types: audit_adjustment (you propose the fix), reclassification (move between accounts), management_override (auditor disagrees with management), passed_unrecorded (immaterial, documented but not posted).
The original TB plus every posted AJE. This is what the financial statements are built from — not the original TB. The Adjusted TB recomputes immediately every time you post an AJE.
Per ISA 701: the matters that, in the auditor's professional judgement, were of most significance during the audit. Examples: revenue recognition, going-concern uncertainty, valuation of investment property. KAM is required only for listed entities — most SME audits don't need them.
An independent partner (not on the engagement team) who reviews the engagement before the report is issued. Required for listed entities and high-risk engagements per ISA 220. The EQCR is the final sign-off in the 5-stage chain.
Who does what — roles in an audit
Performs the procedures, ticks them off, attaches evidence. Drafts initial conclusions.
Reviews the staff's work, raises review points, ensures procedures meet ISA quality standard.
Second-level review, focuses on conclusions, materiality decisions, audit risk.
Final review. Signs the Auditor's Report. Carries the professional liability.
Independent quality-control reviewer. Final sign-off before issue. Their sign-off locks the file per ISA 230.
The 5 regulatory frameworks built in
Every step in this manual references one or more of these frameworks. They are wired into AuditPro Suite — you don't need to memorise paragraph numbers, the system surfaces them where relevant.
The international rule book. Defines audit objectives, evidence, sampling, opinions.
The accounting framework the client's FS must follow.
Oman regulator. Sets retention rules, registration, professional standards.
5% standard VAT, dated rate versioning, compliant invoice presentation.
Mandates legal-reserve transfers (10% of net profit until reserve = 1/3 of share capital).
Each phase page calls out the relevant ISA / IFRS / Oman regulation in a gold badge. By the time you've worked through the manual once, the connections will be familiar.
What's next
Now you know the vocabulary. Time to walk through an actual engagement, starting at the very beginning — when a prospective client first calls.