THE PUBLIC ACCOUNTANT MAY BE RETAINED TO EXAMINE OR SCRUTINIZE ACCOUNTING RECORDS SIMPLY TO PROVIDE ANALYTICAL INFORMATION FOR THE MANAGEMENT OR A MORE SUBSTANTIAL EXAMINATION ENDING IN EXTENSIVE CONCLUSIONS BY THE ACCOUNTANT. ENGAGEMENTS MAY BE ENTERED INTO BY THE INDEPENDENT PUBLIC ACCOUNTANT FOR THE PURPOSE OF EXAMINATION AND TO PREPARE THE FINANCIAL STATEMENTS SPECIFICALLY FOR THIRD PARTY USE. IN THIS CASE, THE CLIENT WILL NOT BE INTERESTED IN MORE THAN A VERIFICATION OF THE FINANCIAL STATEMENT FOR THE PURPOSE OF THE AUDITOR'S OPINION. THE PUBLIC ACCOUNTANT MAY ALSO BE RETAINED SPECIFICALLY FOR THE INVESTIGATION OF SOME TYPE OF IRREGULARITY. ERRORS ARE DEFINED AS UNINTENTIONAL MISTAKES, WHILE IRREGULARITIES ARE DEFINED AS INTENTIONAL DISTORTIONS OF FINANCIAL STATEMENTS BY MANAGEMENT (MANAGEMENT FRAUD) OR MISAPPROPRIATIONS OF ASSETS BY EMPLOYEES (DEFALCATION). AN AUDIT REQUIRING NO OPINION, WHERE NO THIRD PARTY USE IS ANTICIPATED, INCLUDES CLOSING BOOKS AND MAKING NECESSARY ADJUSTMENTS TO ARRIVE AT A NET INCOME IN ORDER TO PAY INCOME TAXES. AN AUDIT IN WHICH THIRD PARTY USE IS ANTICIPATED REQUIRES A STUDY OF THE INTERNAL CONTROL AND AN AUDIT PROGRAM. AN INVESTIGATION OF IRREGULARITIES REQUIRES THE USE OF A VERY DETAILED AUDIT PROGRAM IN WHICH ALL DETAIL IS VERIFIED, ALL RECORDS ARE BALANCED, AND EVERY QUESTION IS ANSWERED. THUS, THE AREA OF ERROR DETECTION IN AUDITING IS SOMEWHAT DIFFICULT. THE PRACTITIONER MUST DEFINE THE SCOPE OF THE ENGAGEMENT, MAKE WHATEVER STUDIES ARE NECESSARY WITHIN THE ENGAGEMENT, PREPARE A WRITTEN PLAN, MAINTAIN RECORDS OF WORK ACCOMPLISHED AND TESTS MADE, AND NOTE ERRORS AND IRREGULARITIES FOUND AND DISCUSS THESE WITH THE CLIENT. AN INTERNAL CONTROL CHECKLIST IS APPENDED. (PRG)