Principles of Auditing

Principles of Auditing

When the audit firms in Johor Bahru perform an audit, they need to follow some principles. By adhering to the principles, the audit can be a dependable and useful tool as it helps the companies in the management of controls (Also see What is a Test of Control) and policies. This is because an audit provides information about the ways an organisation can act to boost its performance. For the auditors to provide sufficient and relevant audit conclusions, as well as work independently from each other, it is a must for them to comply with these principles.


Integrity founds professionalism. The auditors need to be diligent, competent, responsible and honest when they perform the audit. For example, they should report any material misstatements (Also see What is Audit Materiality) that they have found out honestly without being affected by any parties. Besides, they should observe and follow the appropriate legal requirements. They have to be unbiased and fair when they conduct their work, which indicates that they should maintain impartiality in all deals. Also, when performing an audit, auditors should pay attention to any factors that might influence their judgement.

Fair presentation

This principle requires the auditors to report accurately and truthfully. All audit reports (Also see Introduction to Audit Documentation), audit findings and audit conclusions need to show the audit activities the auditors have carried out accurately and truthfully. If there are any significant issues that the auditee and auditors have encountered in the audit process, or there are any different unresolved opinions, the auditors should include them in the audit report. The communication between both parties should be complete, clear, accurate, objective, truthful and timely.

Due professional care

In every audit, the auditors should make sure that they have implemented due diligence and good judgement. They need to apply due care in their audit work since this is an important task, and the audit client and those relevant parties have placed a lot of confidence in them. The crucial factor in this principle is that the auditors need to ensure that they can make rational judgements regardless of the audit situations they face.


Confidentiality refers to the security of the audit client’s information. This principle is about the proper handling of confidential or specific information. When the auditors perform their job, they need to be discreet in protecting and using the information they have obtained from their client. Both the auditors and the audit client should never misuse the audit information for their own benefit, or in any way that is harmful to the auditee’s legitimate interest.  


This principle is the foundation of the audit’s impartiality as well as the audit conclusion’s objectivity. If possible, the auditors need to be independent of the activity they audit, and they should make sure that no conflict of interest or bias can influence their action. As in the case of internal audits, auditors need to maintain their independence from the operating managers of the activity they audit. Besides, auditors need to be objective in the entire audit process to make sure that they will only present their audit findings or make audit conclusions (Also see How Do Auditors Close An Audit)according to the audit evidence they acquire.

Although the internal auditors of small companies may not be able to be completely independent of the activity they are auditing, they should make every effort they can to encourage objectivity and minimise bias. They need to assess the internal controls (Also see How Does Internal Control Help in Overcoming Payroll Fraud) that some of the departments are implementing based on the evidence collected without being bias to those departments or certain individuals.

Evidence-based approach

It refers to a rational method the auditors should use in a well-organised audit process for them to reach reproducible and reliable audit conclusions. Auditors should make sure that the audit evidence they have acquired is verifiable. Generally, audit evidence is based on the samples of available information, as the auditors conduct an audit in a specific time frame with particular resources. The auditors need to apply an appropriate sampling method, as this has a close relationship with how much confidence the company and other related parties can put into the audit conclusions.

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