Audit instruments and techniques – tests employed in external audits

The thesis deals with the verification of selected internal processes and items in final accounts of the company Graziano Trasmissioni, Ltd. The theoretical basis of the thesis concerns problems with audit planning and performance. It provides an explanation of essential audit definitions, objectives and phases and a description of audit risks. It characterises methods which can be used for obtaining appropriate and sufficient audit evidence that is necessary for expressing the auditor's opinion about credibility of final accounts. The emphasis is on obtaining information with the assistance of control and substantive tests. In the practical part of the thesis, control tests are applied to a purchase and sales process. The test results should show whether the internal control mechanisms are effective or not. The substantive tests validate balances of accounts receivable and accounts payable. The specific objectives are tested and the results prove whether the account balances are misrepresented in the financial statements or not.