Generic definition of audit and its stages

Summary:

In this article we present a set of theoretical elements of the Audit, starting from a set of definitions of the same and characterizing each one of the stages through which the exercise of the same must pass. Furthermore, we emphasize as a vitally important task the Supervision as an element that guarantees to some extent the quality of the Audit. In addition, the role of the Supervisor for the development of this task and the characteristics that it must have are emphasized.

Introduction:

The Audit plays a fundamental role in the maintenance of these companies that are needed, since it implies the control of the resources that it has, in turn the quality of the Audits is one of the most important issues to improve in this branch Because the reliability of the control states of our companies depends on this.

The Supervision of the Audits constitutes an aspect of vital importance according to current trends, since it means the verification and security that these have been carried out in compliance with the principles and standards established for the exercise of the Audit and allow evaluating the correspondence of the opinion issued by the group of auditors with the actual situation of the audited entity. This issue has constituted a need identified at the international level and in the national context, the Ministry of Audit and Control has pronounced itself for designing a procedure that allows determining the reliability and quality of the work carried out by inspection entities.

Worldwide, situations have arisen that have put the criteria and work carried out by auditors in crisis, causing a deterioration in the prestige of the auditor and his independence caused by corruption and other types of fraud from which no country is exempt..

Development

Generic Definition of Audit.

There is more than one definition of Audit, but this time we will see the definitions that can help us understand and fully understand the process itself.

Then we will understand as Audit:

• A collection, accumulation and evaluation of evidence on information of an entity, to determine and report the degree of compliance between the information and the established criteria. A systematic process to obtain and evaluate objectively, the evidence related to reports on economic activities and other situations that have a direct relationship with the activities that take place in a public or private entity. The purpose of the process is to determine the degree of precision of the informative content with the evidences that gave rise to it, as well as to determine if said reports have been prepared observing established principles for the case &.

From this second definition we will obtain some points that are important to analyze to know that the Audit is a process that has several characteristics, which are essential for a complete and correct execution.

It is a systematic process, this means that in every Audit there must be a set of logical and organized procedures that the auditor must comply with in order to gather the information he needs to issue his final opinion. However, it should be noted that these procedures vary according to the characteristics that each company meets, but this does not mean that the auditor should not comply with the general standards established by the profession.

Also in this definition it is indicated that the evidence is obtained and evaluated objectively, this means that the auditor must carry out his work with an attitude of neutral independence from his work.

The evidence that the auditor should obtain consists of a wide range of information and data that can help him prepare his final report. This definition is not strict regarding the nature of the evidence that has been reviewed, rather it indicates that the auditor must use his professional judgment to know which of all the evidence that he has is appropriate for the work that he is performing, he You must consider any element or data that allows you to make an objective evaluation and express a professional opinion.

The reports to which the definition refers, not only refers to economic activities, that is, financial reports of the company, but also being a general definition, professional criteria can be applied to relate it to other activities of personal interest..

The auditor has a role to play in this process, which is to determine the degree of precision that exists between the events that actually occur and the reports that have been produced after those events have occurred.

The auditor should carry out an evaluation and a report of the events reviewed, for this he must adhere to established principles. The auditor must clearly know the principles applied in each report he issues, he must also have sufficient capacity to determine that these principles have been applied correctly in each situation. Most commonly, the auditor performs his or her work in accordance with generally accepted accounting principles (GAAP), however on some occasions the appropriate principles are some laws, regulations, contractual agreements, procedure manuals, and other provisions established. the topic.

As we have previously seen, Auditing is a process through which a subject (auditor) carries out the review of an object (audited situation), in order to express an opinion about its reasonableness (or fidelity), on the basis of an established pattern or standard.

1.2.1 Definition of Audit

The word Audit comes from the Latin AUDITORIUS, and from this comes auditor, who has the virtue of hearing, and the dictionary considers him a collegiate auditor, but it is assumed that this virtue of hearing and reviewing accounts is aimed at evaluating the economy, the efficiency and effectiveness in the use of resources, as well as their control.

The Audit can be defined as “a systematic process to obtain and objectively evaluate the evidence related to reports on economic activities and other related events, whose purpose is to determine the degree of correspondence of the informative content with the evidence that gave rise to it, thus how to establish whether these reports have been prepared observing the principles established for the case. "

On the other hand, the Audit constitutes a control and supervision tool that contributes to the creation of a culture of the discipline of the organization and allows to discover flaws in the structures or existing vulnerabilities in the organization.

Another element of interest is that, during the performance of their work, the auditors meet new advanced technologies on a daily basis in the entities, which is why they require the systematic incorporation of tools with the same technical requirements, as well as increasingly in-depth knowledge. of the most widespread IT techniques in management control.

1.3- Concept of audit

It is the investigation, consultation, review, verification, verification and evidence applied to the Company. It is the examination carried out by qualified and independent personnel in accordance with Accounting Standards; in order to wait for an opinion that shows what happened in the business; Fundamental requirement is independence.

Auditing is also defined as a systematic process, which consists of obtaining and objectively evaluating evidence on the claims related to acts or events of an economic - administrative nature, in order to determine the degree of correspondence between those claims and the established criteria, and then communicate the results to interested people. It is practiced by qualified and independent professionals, in accordance with technical standards and procedures.

1.2.3 Classification of Audits.

According to the auditor's affiliation, the Audits are classified:

• · External Audit, which includes the state audit and the independent audit · Internal Audit.

In turn, the state audit can be General or Fiscal.

• External audit:

It is the examination or verification of transactions, accounts, information, or financial statements, corresponding to a period, evaluating the compliance or compliance with the legal or internal provisions in force in the accounting internal control system. It is practiced by empowered professionals, who are not employees of the organization whose claims or statements are audited.

In addition, it examines and evaluates the planning, organization, direction and internal administrative control, the economy and efficiency with which the human, material and financial resources have been used, as well as the result of the planned operations in order to determine if the proposed goals.

Fiscal.

The external audit that is carried out by the Ministry of Finance and Prices, its dependencies or other entities expressly empowered by it, is called fiscal to determine if the taxes to the treasury are made in the amount due and within the terms and forms, established. (It is the responsibility of the National Tax Administration Office - ONAT to exercise these functions). Independent audit.

An independent audit is the external audit carried out by a civil society of services or other organizations to private, mixed entities, other forms of economic associations, the state and cooperative sector, organizations and associations, natural and legal persons, that contract the service of the.Internal audit. Internal audit is the control that is developed as an instrument of the administration itself and consists of an independent assessment of its activities; which includes the examination of the internal control systems, of the accounting and financial operations and of the application of the corresponding administrative and legal provisions; in order to improve the control and degree of economy, efficiency and effectiveness in the use of resources;prevent the improper use of these and contribute to the strengthening of discipline in general. According to the fundamental objectives pursued, the audits can be:

Management or Operational.

It consists of the examination and evaluation that is carried out on an entity to establish the degree of economy, efficiency and effectiveness in the planning, control and use of resources and to verify compliance with the relevant provisions, with the aim of verifying the most rational use resources and improve the activities and subjects examined.

Financial or Financial Statements.

It consists of the examination and evaluation of the entity's documents, operations, records and financial statements, to determine if they reasonably reflect its financial situation and the results of its operations, as well as compliance with economic and financial provisions, with the objective of improving procedures related to economic - financial management and internal control.

Special.

It consists of the verification of specific matters and subjects, of a part of the financial or administrative operations, of certain facts or special situations and respond to a specific need.

Likewise, they include research work, and the audit that is carried out with the aim of knowing to what extent the deficiencies previously detected have been eradicated. These cases are commonly identified as Recurring or Follow-up Audits.

Fiscal.

It consists of the examination of the operations related to taxes to the treasury, to which the state entity or natural or legal person of the non-state sector is obliged, with the objective of determining if they are carried out in the corresponding amount, within the terms and established forms, and proceed according to law.

These definitions correspond to those established in Decree Law 159 On Auditing of June 8, 1995.

NAGAS

Concept

The Generally Accepted Auditing Standards (NAGAS) are the fundamental principles of Auditing to which auditors should fit their performance during the audit process. Compliance with these standards guarantees the quality of the auditor's professional work.

Origin

Las NAGAS, has its origin in the Bulletins (Statement on Auditing Standard - SAS) issued by the Audit Committee of the American Institute of Public Accountants of the United States of America in 1948

Therefore, these standards are mandatory for Public Accountants who carry out the Audit in our country, since it will also serve as a measurement parameter of their professional performance and for students as guidelines for conduct where they will have to walk when be professional.

NAGAS Classification

Currently the NAGAS, in force in our country are 10, the same that constitute the (10) ten commandments for the auditor and are:

General or Personal Rules

to. Training and professional capacity

b. Independence

c. Care or professional dedication.

Work Execution Standards

d. Planning and Supervision

e. Study and Evaluation of Internal Control

f. Sufficient and Competent Evidence

Report Preparation Standards

g. Application of Generally Accepted Accounting Principles.

h. Consistency

i. Disclosure Enough

j. Auditor's opinion

Definition of Standards

These rules, due to their general nature, apply to the entire examination process and are basically related to the auditor's functional conduct as a human person and regulates the requirements and skills that must be met to act as Auditor.

Most of this group of norms are also contemplated in the Codes of Ethics of other professions. The Standards detailed above are defined as follows:

1st Training and Professional Capacity

"The audit should be carried out by personnel who have the technical training and expertise as an auditor."

As can be seen from this standard, it is not only enough to be a Public Accountant to exercise the role of Auditor, but it is also required to have adequate technical training and expertise as an auditor. That is, in addition to the technical knowledge obtained in university studies, practical application in the field is required with good management and supervision. This constant training, training and practice shapes the maturity of the auditor's judgment, based on the experience accumulated in its different interventions, finding itself in a position to exercise Auditing as a specialty. Otherwise, it would be to deny their own existence because it will not guarantee professional quality to the users, this despite the fact that the rules are multiplied to regulate their performance.

Independence

"In all matters related to Auditing, the auditor must maintain independent judgment."

Independence can be conceived as the professional freedom that assists the auditor to express his opinion free of pressures (political, religious, family, etc.) and subjectivities (personal feelings and group interests).

Therefore, impartial objectivity is required in their professional performance. Although it is true, the independence of criteria is a mental attitude, the auditor must not only "be it", but also "seem it", that is, take care of his image before the users of his report, who is not only the client who hired him but also the other interested parties (banks, suppliers, workers, state, town, etc.).

Care Or Professional Dedication

"Professional care must be exercised in the execution of the Audit and in the preparation of the opinion."

Professional care is applicable for all professions, since any service that is provided to the public must be done with all the diligence of the case, the opposite is negligence, which is punishable. A professional may be very capable, but he totally loses his value when he acts negligently.

The professional dedication of the auditor is not only applied in the field work and preparation of the report, but in all phases of the Audit process, that is, also in planning or strategic planning taking care of materiality and risk.

Therefore, the auditor will always aim to do things well, with all integrity and responsibility in their performance, establishing a timely and adequate supervision of the entire audit process.

Work Execution Standards

These standards are more specific and regulate the form of the auditor's work during the development of the Audit in its different phases (planning field work and preparing the report). Perhaps the main purpose of this group of standards is for the auditor to obtain sufficient evidence in their working papers to support their opinion on the reliability of the financial statements, for which, adequate strategic planning and evaluation are previously required. of internal controls. Currently the new opinion emphasizes these aspects in the scope paragraph.

Planning and Supervision

"The audit must be properly planned and the work of the auditor's assistants, if any, must be properly supervised."

Due to the great importance that has been given to planning in recent years at the national and international level, today strategic planning is conceived as a whole work process that is highly emphasized, using the "top-down" approach, that is to say, it should not start by reviewing individual transactions and balances, but by taking knowledge and analyzing the characteristics of the business, the organization, financing, production systems, functions of the basic areas and important problems, the economic effects of which could have a significant impact on the financial statements subject to our examination. Logically, the planning ends with the preparation of the Audit program.

In the case of an Audit commission, the supervision of the work must be carried out in a timely manner at all stages of the process, that is, planning, field work and preparation of the report, guaranteeing its professional quality. This supervision should be recorded in the working papers.

Study and Evaluation of Internal Control

«The internal control structure (of the company whose financial statements are subject to audit0 must be properly studied and evaluated0 as a basis to establish the degree of confidence it deserves, and consequently, to determine the nature, scope and timeliness of the procedures audit".

The study of internal control constitutes the basis for relying or not on the accounting records and thus being able to determine the nature, scope and timeliness of the Audit procedures or tests. Currently, much emphasis has been placed on internal controls and their study and evaluation leads to a whole process that begins with an understanding, continues with a preliminary evaluation, compliance tests, reevaluation of controls, finally arriving - according to your evaluation results - to limit or expand substantive testing.

In this sense, the internal control works as a thermometer to measure the size of the supporting tests.

The modern concept of internal control includes the components of the control environment, risk assessment, control activities, information and communication, and those of supervision and monitoring.

The evaluation methods that are generally used are: descriptive, questionnaires and gram flow.

Sufficient And Competent Evidence

“Competent and sufficient evidence must be obtained through inspection, observation, inquiry and confirmation to provide a reasonable basis that allows the expression of an opinion on the financial statements subject to the Audit.

As can be seen from the statement of this standard, the auditor, by applying the Auditing techniques, will obtain sufficient and competent evidence.

Evidence is a set of proven, sufficient, competent and pertinent facts to support a conclusion.

The evidence will be sufficient, when the results of one or more tests assure the moral certainty that the facts to be proven, or the criteria whose correctness is being judged, have been reasonably proven. Auditors also obtain sufficient evidence through absolute certainty, but mostly with moral certainty.

It is important to remember that it will be the maturity of the auditor's judgment (obtained from experience), which will allow him to achieve sufficient moral certainty to determine that the fact has been reasonably verified, so that as it decreases (decreases) Through the different levels of experience of the auditors, moral certainty will be poorer. This is why supervision of assistants by experienced auditors is required to achieve sufficient evidence.

The evidence is competent when it refers to facts, circumstances or criteria that have real importance, in relation to the matter examined.

Among the kinds of evidence the auditor obtains we have:

1. Evidence about internal control and the accounting system, because both influence the balances of the financial statements.

   b. Physical evidence Documentary evidence (originated inside and outside the entity) Daily and older books (includes records processed by computer) Global analysis Independent calculations (computation or calculation) Circumstantial evidence Events or subsequent events.

Report Preparation Rules

These standards regulate the last phase of the Audit process, that is, the preparation of the report, for which the auditor will have accumulated the evidence to a sufficient degree, duly supported in his working papers.

For this reason, this group of standards requires the report to set out how the financial statements are presented and the degree of responsibility assumed by the auditor.

Application of Generally Accepted Accounting Principles (GAAP)

"The opinion must express whether the financial statements are presented in accordance with generally accepted accounting principles."

The generally accepted accounting principles are general rules, adopted as guides and as a basis for accounting, approved as good and prevailing, or we could also conceptualize them as laws or fundamental truths approved by the accounting profession.

However, it is worth clarifying that GAAP are not principles of nature but rules of professional behavior, so they are not immutable and need to be adapted to meet the changing circumstances of the entity where the accounting is kept.

GAAP guarantees the reasonableness of the information expressed through the Financial Statements and its observance is the responsibility of the company examined.

In any case, it is up to the auditor to disclose in his report whether the company has been framed within accounting principles.

4. Auditor's Opinion

"The opinion must contain the expression of an opinion on the financial statements taken in their entirety, or the assertion that an opinion cannot be expressed. In the latter case, the reasons that prevent it must be indicated. In all cases, in which the name of an auditor is associated with financial statements, the opinion must contain a clear indication of the nature of the Audit, and the degree of responsibility it is taking ”.

Let us remember that the main purpose of the Audit of financial statements is to issue an opinion on whether or not they reasonably present the financial situation and results of operations, but the case may arise that despite all the efforts made by the auditor, If you have been unable to form an opinion, then you will be forced to refrain from giving an opinion.

Therefore, the auditor has the following alternatives of opinion for his opinion.

1. Clean or unqualified opinion Qualified or qualified opinion Adverse or negative opinion Refraining from opinion

Audit Stages

All the stages of the Audit are very important and for this reason we must not escape any in the Audit process, they are divided into five parts and are the following:

Exploration

Exploration is the stage in which the study or examination is carried out prior to the start of the Audit with the purpose of knowing in detail the characteristics of the entity to be audited to have the necessary elements that allow adequate planning of the work to be carried out and direct it. towards the issues that are of greatest interest according to the intended objectives.

The results of the exploration also allow the selection and adjustments to the methodology and programs to be used; as well as determining the importance of the subjects to be examined.

It also makes it possible to assess the degree of reliability of internal control (accounting and administrative) as well as the fact that in the planning stage a more efficient and rational work plan is drawn up for each auditor, which ensures that the audit must be carried out with due quality., economy, efficiency and effectiveness; promoting, to a large extent, the success of its execution.

In the entity, interviews must be carried out with the main leaders in order to explain the objective of the Audit, and to know or update in detail the data regarding structure, amount of dependency, development of the activity carried out, production flow or the services it provides and other essential information for proper planning of the work to be carried out.

Planning

The fundamental work at this stage is to define the strategy to be followed in the audit to be undertaken.

The aforementioned involves planning the topics to be executed, so as to ensure that a high-quality audit is carried out and that it is achieved with the due economy, efficiency, effectiveness and promptness.

Based on the objectives and scope foreseen for the Audit and considering all the information obtained and knowledge acquired about the entity in the exploration stage, the group leader proceeds to plan the tasks to be carried out and the necessary checks to achieve the objectives of the Audit.

Likewise, it must determine the relative importance of the topics to be audited and reevaluate the need for personnel according to the elements available to it.

After the time to be used in the execution of each verification or verification has been determined, the overall or general plan of the Audit is prepared, which must be included in a document that contains at least:

• Definition of the topics and tasks to be carried out. Name of the specialist (s) involved in each of them. Planned start and end dates for each task. It is considered from exploration to completion of work.

Likewise, the individual work plan of each specialist is prepared, considering as a minimum:

• Name of the specialist. Definition of the topics and each of the tasks to be carried out. Start and end date of each task.

Any extension of the planned term must be authorized by the supervisor or another higher level; leaving a record in the audit file.

At the discretion of the group leader, both the general plan of the Audit, as well as the individual plan of each specialist, can be included in a single document based on the number of tasks to be performed, the number of subordinate specialists, etc.

Supervision

The essential purpose of supervision is to ensure compliance with the objectives of the Audit and the reasonable quality of the work. Adequate supervision and control of the Audit are necessary in all cases and at all stages of the work, from exploration to the issuance of the report and its analysis with the factors of the audited entity.

Likewise, it must guarantee compliance with the Auditing Standards and that the final report correctly reflects the results of the verifications, verifications and investigations carried out.

Adequate supervision must ensure that:

All the members of the Audit group have understood, clearly and satisfactorily, the Audit plan, and that they have no personal impediments that limit their participation in the work.

The Audit is carried out in accordance with the Auditing Standards (Chapter II) and the generally accepted practices for this activity.

The Audit plan drawn up for this purpose is followed and the foreseen procedures are applied, considering the authorized modifications.

The working papers contain evidence that correctly supports the indications in the final report.

In the final report of the Audit, the conclusions, details and recommendations that are considered pertinent according to the results of the reviews carried out are presented.

Supervision normally has two levels of execution: the one corresponding to that carried out systematically by the group leader and the one carried out by the Ministry official designated as supervisor.

Execution

The fundamental purpose of this stage is to collect the evidence that supports the auditor's opinions regarding the work performed, it is the phase, to say the least, of the field work, this largely depends on the degree of depth with which the two previous stages, in this the Working Papers and the note sheets are elaborated, instruments that exceptionally support the opinion of the acting auditor.

Report

At this stage, the Auditor is dedicated to formalizing in a document the results that the auditors arrived at in the audit carried out and other verifications related to the work performed.

Communicate the results to the highest level of management of the audited entity and other administrative bodies, as well as to the corresponding authorities, when appropriate.

The report is based on the summaries of the topics and the Acts of Notification of the Audit Results (partial) that are prepared and analyzed with the auditees, respectively, during the course of the Audit.

The preparation of the final Audit report is one of the most important and complex phases of the Audit, so it requires extreme care in its preparation.

The Audit report must have a uniform format and be divided into sections to provide the reader with a quick location of the content of each one.

The Audit report must comply with the following principles:

• That it be issued by the group leader of the acting auditors. In writing. Timely. That it is complete, exact, objective and convincing, as well as clear, concise and easy to understand. That everything that is recorded is reflected in the work and that they respond to relevant findings with sufficient and competent evidence. That it reflects an independent attitude. That it shows the qualification according to the evaluation of the results of the Audit. Quick and adequate distribution.

Tracing

In this stage, the results of an Audit are followed, as the word says, generally an Audit evaluated as Poor or bad, so after a period of approximately six months or a year, another recurring Audit is carried out to check the true compliance with the deficiencies detected in the Audit.

Supervision

Definition

Supervision is an old concept that has undergone various changes and has been viewed from different perspectives. Knowing these antecedents is essential to locate a function as important as the one discussed in this course, within the context of the Public Audit.

The word supervision is derived from the Latin words "super" and "vice", which means "to see on", which translates as looking from above an activity. The term SUPERVISION is traditionally used to define the act of supervision that a person exercises over the work performed by the personnel under his command.

However, in order to develop a definition of supervision of the work of Public Auditing, it should be remembered that within the internal control bodies there are various "levels of supervision", which are determined by the size of its organic structure. According to Cameron C. Smith, in his book "Guidelines for Supervisors", these levels can be considered as managers, and their responsibilities consist of planning, organizing, directing and controlling the work of their unit, as well as coordinating resources, improving the group and individual work of their subordinates; promote communication to give instructions, receive information, transmit results and make decisions to make their work effective.

Therefore, it is vitally important that the supervisor has knowledge of the way in which techniques, procedures and compliance with regulations are applied in the work of Auditing, which will give him a broader vision and allow him to carry out more work. professional.

Over time and due to the accelerated and disorganized growth of companies, as well as the need to increase efficiency and competitiveness in organizations, techniques, principles and theories were developed that transformed the supervisory function from an empirical practice to a task. technical and specialized. Implicit in this evolution is the recognition of human resources as the most important element for achieving objectives.

Supervision is now a function that enables the work of a team to be monitored, inspected, evaluated and conducted, as well as to promote that it works according to the criteria of economy, efficiency, effectiveness, effectiveness, impartiality and honesty.

As can be seen, supervision has been necessary whenever the work has involved the joint effort of a team of people.

Therefore, the supervisor is the one who within the organization leads a group of people entrusted to him, towards the fulfillment of goals and objectives, and is directly responsible for the coordination, direction, verification, inspection and quality of work.

The work of public Audit that is carried out in the dependencies and entities, makes the exercise of supervision necessary to guarantee the achievement of the objectives that support the existence of the internal control bodies.

1.9.2- Background

Supervision, like administration, has been further developed since the Industrial Revolution, where profound changes take place that completely modify the social, economic and political structure of that time.

Among the main changes that were generated took place the replacement of manual labor by mechanized ones, greater speed, quantity and quality of production and great demand for the labor force, which caused the creation and multiplication of manufacturing industries. For this to be possible, there was a need to shape the organization of work differently, which led to the introduction of new concepts, including:

• The division of labor and the specialization of tasks; The standardization of functions; The unity of command and centralization in decision making; yThe formalization of labor relations.

The application of these concepts to the industry resulted in the supervision of tasks adopting the following characteristics:

• Surveillance of the work that was done in order to increase production and improve quality, at the lowest possible cost; Emphasis on results, without taking into account the worker as an individual; Surveillance of strict adherence to the rules.

In order to carry out this function, the assignment of a technically trained person, who was known at the time as "foreman", became essential.

This person exercised complete authority over the personnel who performed the tasks: recruited, disciplined, and fired; likewise, she selected materials, made inventories, organized the workplace, etc.

Importance of Supervision

The success of each Audit depends largely on the effectiveness of supervision of personnel at all levels.

The time spent giving effective on-the-job instruction often saves the need for corrective action during development and prevents duplication of activities.

Supervision is an essential element for the proper development of the Audit function, since it allows controlling the activities carried out in it. For this reason, it has been elevated to the category of norm, so that it is included in the work carried out by the internal control bodies.

Internal control systems require supervision, that is, a process that checks that the proper functioning of the system is maintained over time. This is accomplished through ongoing monitoring activities, periodic evaluations, or a combination of both. Continued supervision occurs in the course of operations. It includes both normal management and supervisory activities and other activities carried out by staff in the performance of their duties. The scope and frequency of periodic evaluations will depend essentially on a risk assessment and the effectiveness of ongoing monitoring processes. The deficiencies detected in the internal control must be reported to higher levels,while senior management and the board of directors must be informed of the significant aspects observed.

These components, linked together, generate synergy and form an integrated system that responds in a dynamic way to the changing circumstances of the environment. The internal control system is intertwined with the entity's operating activities and exists for fundamental business reasons. The internal control system is more effective when the controls are incorporated into the infrastructure of the company and form part of the essence of the company. Through built-in controls, quality and empowerment initiatives are fostered, unnecessary expense is avoided, and rapid response to changing circumstances is allowed.

Supervision Objectives

The supervision pursues certain objectives that make it possible to promote the actions to exercise it in the best way and to evaluate the effectiveness of its application. These objectives are, among others, the following:

• Increase the quality of the audits, through the periodic review of the auditor's work, based on the objectives set; Achieve that the reviews are carried out with the utmost economy, efficiency, effectiveness, effectiveness, impartiality and honesty and with adherence to the General Public Auditing Standards and other applicable regulations; Prepare the work papers in such a way that they adequately support the objectives set and provide objective information; In addition, obtain sufficient, competent, relevant and pertinent evidence in the audits; Achieve that the auditors develop the necessary capacity to carry out the Public Audit; Know immediately and at any time the progress of the Audit;Determine if specific Audit procedures have been fully applied. Increase human and professional work relationships in Audit groups.

Supervisor authority

The supervisor, due to the nature of his functions, must influence the conduct of the group of auditors in his charge, so that they fulfill their responsibilities, and with it, he can do the same with those that correspond to him. These situations have caused the organization to invest it with authority; reason why this can be defined as the right that an individual has to influence the conduct of another.

In the aforementioned case, the authority conferred on the supervisor becomes an instrument to support their functions, which contributes to orienting the particular interests of each auditor, to the interest of meeting the objectives pursued in each review carried out by the body. internal control.

The right that the organization grants to an individual to influence the conduct of others is known as FORMAL AUTHORITY. It should be understood that this concession is according to the degree of responsibility of the one who exercises it.

However, there is another type of authority that originates from the abilities, knowledge or experience, among other personal characteristics of an individual, known as INFORMAL AUTHORITY, which arises without any organization provision and is developed through informal channels. of communication that necessarily appear in any group.

A good supervisor should try to base his authority not only on the right that the organization gives him, but on the respect that his knowledge, skills and interest impose to face the daily problems of his work. In this way, it will also have the voluntary concession of its subordinates to exercise said authority.

Functions of the Supervisor at each stage of the Audit

The review carried out by the supervisor does not have the same consistency as that of the group leader, but it is carried out at all stages of the Audit and they are:

Exploration

The supervisor must check at this stage whether the degree of reliability given by the group leader on internal control (accounting and administrative) corresponds to the elements provided by the reviews, checks and updates of data, background and other issues, as provided in the Exploration Document of this Chapter.

Likewise, it should evaluate the suggestions of the group leader regarding the advisability or need to vary the original objective or scope of the Audit.

Of planning

The supervisor verifies that the planning of the Audit responds to the general objectives initially established or, to which they were added or modified later. Likewise, if they are consistent with the results of the previous exploration performed; checking that within said planning are reflected as a minimum:

• The auditable period That the areas to be audited constitute the most relevant to achieve the objectives of the Audit The detail of the main verifications to be carried out, including the verifications to be carried out aimed at verifying that the violations and deficiencies detected in Previous audits. That there is a rational distribution of the tasks to be carried out among the acting auditors and the specialists from other spheres that participate, as well as that they have their individual work plan. That the time assigned to each task is adequate, taking into account its complexity and the experience of the auditor responsible for its execution.

After verifying the above, it proceeds to approve the planning.

Of execution

At this stage the supervisor must visit the unit in which the work is being carried out, checking, mainly, by reviewing the work papers; that the Auditing Standards are being complied with according to the phase of the work being carried out, including: that a study and consequent evaluation of internal control (accounting and administrative) has been or is being carried out, the results of which will inform the scope and the extent of the verifications and checks carried out or to be carried out in the Audit.

In addition, you should consider:

• The level of compliance with the objectives set and the planning approved. That the checks carried out have the adequate depth and correctly show the results, as well as that the evidence of the findings meet the requirements of sufficiency, relevance and competence. The samples used allow, from the verifications and verifications carried out, to infer the status of the operations in the period selected as auditable. Evidence that meetings have been held with the heads of the audited areas to report the results of the verifications and verifications carried out, as well as, that their opinions are included in the Acts of Notification of the Audit Results (partial);This is confirmed by the signature of the entity's official and that of the acting auditor. That, if possible, the preparation of the final report of the Audit is being prepared parallel to the development of the Audit. That in the preparation of the work papers the provisions of the document Concepts, Purposes and Requirements (Chapter VIII) are complied with.

Preparation of the final report

At this stage, the final report of the Audit is given final form and is generally completed upon completion of the audit; being the stage in which the supervisor must verify that the Auditing Standards have been observed, especially Chapter 5, referring to: Reporting Standards and what is stated in the Audit Report Chapter of this Manual; Also, check:

• The adequate preparation of the work papers as indicated in the Execution stage. Cross references between the work papers and the final report. That the rating given to internal control (accounting and administrative) and other evaluations that are given According to the type of audit (Res. No. ONA 5-2000) are reasonable, adequate and consistent with the results of the audit, that everything stated in the final report is reflected in the working papers and that it responds to relevant findings with sufficient and competent evidence, that the results of the checks in each area have been analyzed with a comprehensive approach, so that it is possible to concretize those results in their intimate relationship, and the overall impact on the entity's management That the report also complies,with what is established in the Audit Report Chapter of this Manual.

At all stages, the supervisor must record in the working papers and documents reviewed, by signature or personal stamp and date on which the verification was performed, as well as the guidance provided, if the latter is necessary.

1.12-Other functions of the supervisor

Among its functions, the supervisor must present in writing his assessment of the development of the audit and its results, especially regarding the fulfillment of the planned objectives, as well as the guidelines given to the group leader and acting auditors.

Likewise, you must inform the head of the corresponding organizational unit of the Ministry of the results of each supervision carried out and your final assessment of the work.

When determined by the head of the Ministry's organizational audit unit, the supervisor must participate in the audit results analysis meeting with the factors of the audited entity. It should be noted that participation in this meeting allows you to assess the performance of the group leader in that meeting.

Bibliography:

• Benítez Miranda, Miguel Ángel, Ms Miranda Dearubas, María Victoria. Accounting and Finance for the economic training of management teams / Ángel Miguel Benítez Miranda, Maria Victoria Mirandas Dearubas. -Ministry of Light Industry; 1997 Bolten, Steven E. Financial Administration. E. Steven Bolten. Editorial Limusa SA Balderas. University of Houston, Mexico. DF; 1995.Blázquez Moral, Juan. Audit. Juan Blázquez Moral. Editorial Nacional de Cuba, Havana; 1965 Collective of authors. CECOFIS. Diploma in General Auditing. Self-study manual. Volume 1 and 2 of 2001 De Miranda, Antonio; Torras, Oscar; González. Audit of socialist companies / Antonio de Miranda, Oscar Torras. University of Havana. Havana; 1974.Decree Law # 159 on Auditing. National Audit Office. Cuba; 1995. Echeverría Hernández, Rogelio.The Internal Audit. Rogelio Echevarria Hernández. Ministry of Finance and Prices; 1994.Holmes, Arthur W: Audit: Principles and Procedures. W Arthur Holmes. Hispanoamerica Publishing House. Mexico. 1952 Lic. Economy Zabaro Babani, León. Audit and Control. Leon Zabaro Babani. September December; 2000.Manual of the MAC Volume I and Ioreno, Joaquín. Finance in the company. Fourth edition. Mexico; 1989.Paton, WA Accountant Manual. WA Paton. Mexico Utecha; 1943 Resolution 100/2004 Regulations on Auditing Standards. ONA. Cuba; 1999. Magazine »Audit and Control» Ministry of Audit and Control. No. 4 of 2001 Magazine "Audit and Control" Ministry of Audit and Control. No. 8 April 2003 Magazine "Audit and Control" Ministry of Audit and Control. Volume I, No. 3. Weston, J. Fred and Capeland, Thomas E. Finance and Administration.Ninth edition. Mexico; nineteen ninety six.

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& John W. Cook and Gary M. Winkle (1987), Audit, 3rd Edition, McGRAW-HILL, Buenos Aires-Argentina.