Audit
The audit process, standards and preparing for an inspection
Lessons: from zero to confident
Topics in order: start with the first lesson and read them one by one. 2 lessons
1Lesson 1 What is audit: what does a profession that began with "hearing" check today, and who needs it?The first lesson of the course: what audit is in plain words, how it differs from a tax audit, which Latin verb the word comes from, and why a shop owner calls in an outside examiner.Start →Where did it all begin?
Why does the word audit come from "hearing"? 6 facts about ancient checks
Today an auditor examines documents and figures. But the word itself means "listening". There is a reason for this: originally accounts were read aloud and checked by listening.
5 November 2026The chequered cloth: how were state accounts checked in medieval England?
The British finance minister's post is still called "Chancellor of the Exchequer" today. The word Exchequer comes from a chequered cloth resembling a chessboard. We look at how the sheriffs' accounts were checked at that table.
5 November 2026The 19th century: when did audit become mandatory and where was the first society of accountants founded?
As joint-stock companies multiplied, owners and managers grew further apart. Who guarantees the trust between them? 19th-century Britain answered this question with law and professional institutions.
5 November 2026How international standards on auditing were born: from New York to Munich
In the 20th century audit went through two major changes: first the USA required by law an independent audit for listed companies, then accountants all over the world began working on unified auditing standards.
5 November 2026From Enron to artificial intelligence: how has audit changed in the 21st century?
The collapse of one large company changed the entire audit profession. Today auditors are moving from sample testing to reviewing all the data with software. The main turning points of 21st-century audit.
5 November 2026Who created the profession: the first independent accountant-auditors of the 19th century
Laws began to demand audits, but who would do the work? A teenager who came out of a bankruptcy office, accountants who examined the accounts of railway companies, and the people who led the first professional societies. Short points about the 19th-century figures who became the face of the audit profession.
6 November 2026"Around" the computer or "through" it: how did auditors turn the computer into an audit tool?
When accounting moved onto magnetic tape, auditors faced a difficult question: how do you check a record you cannot see? Short key points about the generalized audit programs and computer assisted audit techniques (CAAT) that appeared in the 1960s–1970s, and a hypothetical example.
8 November 20261992, 2000, 2021: how has Uzbekistan's law on auditing activity changed?
Audit in Uzbekistan has gone through a three-stage legislative path: the first text of 1992, the new version of 2000 and Law No. ZRU-677 adopted in 2021. Today the international standards on auditing are directly the standards of auditing activity. A table of dates, how long each text was in force and which law to cite in an audit engagement contract.
10 November 2026Articles and briefs
All →If doubt arises about a company's ability to continue operating: which signs does the auditor look at, what does the auditor ask management and when does the report change?
Financial statements are prepared on the assumption that the company will keep operating. When a loan falls due and cash is running out, that assumption comes into doubt. Using a parquet manufacturer as the example: which indicators raise a warning, why management's cash forecast becomes the decisive document and how the auditor's opinion changes if the disclosure in the notes is not sufficient.
12 November 2026Analytical procedures (ISA 520): how does the auditor calculate a figure in advance, compare it with the books and what does it do if there is a difference?
Without opening every rent invoice of a shopping centre, the auditor calculates the expected income from the leased area and the price. The expectation, the acceptable difference, checking management's explanation and documenting it all: 7 points and a worked example from the audit of a shopping centre.
11 November 2026How does an auditor check a figure estimated by management: auditing accounting estimates (ISA 540, revised) and three approaches
An allowance for doubtful debts, a warranty provision, the net realizable value of inventories: these figures are not copied from a document, they are estimated. What ISA 540 requires of the auditor, what estimation uncertainty, complexity and subjectivity are, the three testing approaches and looking back at last year's estimates: on the example of a tile trader.
10 November 2026Agreeing the terms of an audit engagement (ISA 210): what does the auditor check before accepting the work and what goes into the engagement letter?
Before the audit contract is signed, the auditor checks two preconditions and agrees responsibilities with management in writing. The mandatory content of the engagement letter, what to do in a recurring audit and when the terms change: 8 points and a checklist.
9 November 2026Management's written representation (ISA 580): why does the auditor ask for it and what does it contain?
At the end of the audit the auditor asks the director for a signed letter. What does this letter confirm, who signs it, what date is put on it, and how does the report change if the director does not sign: 8 points under ISA 580 and the example of a flour mill.
8 November 2026How audit evidence is gathered: 7 procedures (ISA 500)
Inspection, observation, external confirmation, recalculation, reperformance, analytical procedures and inquiry: what each one proves well and where it is weak. A table using a hypothetical leather goods factory, sufficiency and appropriateness of evidence, and reliability factors.
7 November 2026Quality management in an audit firm: ISQM 1 and ISA 220 (Revised)
Audit quality does not depend only on the skill of one auditor: at firm level there is an eight-component system (ISQM 1), and at the level of each engagement the engagement partner's responsibility (ISA 220). Tables and practical situations using a hypothetical small audit firm.
7 November 2026Materiality in an audit: overall materiality, performance materiality and the clearly trivial threshold (ISA 320 and 450)
Which error does the auditor consider "big", and what does the auditor do with the misstatements found? Using a hypothetical cannery: choosing a benchmark, three thresholds, accumulating misstatements, asking management to correct them and evaluating uncorrected misstatements, all with figures.
7 November 2026The system of internal control: 5 components and how the auditor understands it (ISA 315, revised in 2019)
The five components of the system of internal control shown on a small café, the difference between the design, implementation and operating effectiveness of a control, a table of common deficiencies, and how a deficiency found changes the audit approach.
7 November 2026How is an audit planned: the overall audit strategy and the audit plan (ISA 300)
Before opening a single document, the auditor decides two things: the scope, timing and staffing of the audit (the strategy) and exactly which procedures are performed in each area (the plan). Using a hypothetical dairy plant: who takes part, what is recorded, when the plan is updated, a timeline and a checklist.
7 November 2026Statistical and non-statistical audit sampling: how is a sample built and how is a misstatement found projected to the whole population?
The auditor looked at 72 of 2 400 invoices and found a 1.8 million soum misstatement. What does this mean for the whole year? Two approaches to sampling, five methods, sampling risk and projecting the misstatement to the population with two different calculations.
7 November 2026The lead schedule the auditor asks for: how do you show which accounts each figure in the financial statements is built from?
The auditor looks at a figure in the balance sheet and asks, "where did this come from?" If the answer is in a single schedule, the audit goes faster. The schedule's columns, a trading firm example and an error found with the schedule.
6 November 2026