The revised International Standard on Auditing (ISA) 315 introduces major changes in the approach to risk identification and assessment. The enhancements will affect the planning section of all audits, and audit firms of all sizes will need to revise their approach to risk assessment.
The changes will be effective for audits of financial statements for periods beginning on or after 15 December 2021. The effects of the revisions will be far-reaching and will require firms of all sizes to revise their approach to risk assessments.
This course explains how audits can be planned and performed effectively based on the 2022 version of Draftworx
New terminology, concepts and requirements
• New assertions and combinations of assertions
• New risk assessment procedures (RAP) to obtain an understanding of the
entity and its environment
• Document the sources of information from which the understanding was
obtained
• Class of transaction or account balance ("COTAB")
• Individual Account balance, class of transaction and other disclosure
("COTABD")
• Significant classes of transactions, account balances and disclosures
(“SCOTABD)
• Transactions related to account balances (“TRAB”)
• Relevant assertions
• Controls to be identified for purposes of evaluating the design of a
control and determining whether the control has been implemented
• Identification of the risk of material misstatement at the assertion level
for COTABD and then assess only the identified risks of material
misstatement at the assertion level
• Consideration of whether automated tools and techniques should be
used to assist with obtaining an understanding of the entity and its
environment and to perform risk assessment procedures.
• Extent of work needed for indirect and direct controls
• Use of inherent risk factors
• Spectrum of inherent risk
• Likelihood and magnitude of a possible misstatement on a range from
higher to lower, when assessing risks of material misstatement
• “Stand-back" provision to evaluate the completeness of SCOTABD
• Design and perform substantive procedures for each material COTABD
• Substantive procedures for SCOTABD, i.e., those with relevant assertions
• Assertions to be tested for material COTABD.
The following sections in Draftworx will be discussed
Engagement team setup
• 10.00 Engagement acceptance and Continuance
• 10.04 Accounting framework
• 10.10 Planning materiality
• 10.15 Audit type selection
• 10.20 Identification of audit sections
Planning and Risk Identification
• 11.25 Preliminary analytical procedures
• 12.05 Overall audit strategy
• 12.10 Understanding the entity
• 12.15 Fraud discussion
• 12.40 Entity-level controls
• 12.45 General IT controls
• 12.70 ISA 240 considerations
• 12.95 Risk identification sign-off
Risk assessment per component (RAC)
• 12.05 Fraud RAC
• 16.05 Business RAC
Audit plan
• 17.00 Risk assessment summaries
• 17.05 Audit plan
This course is suitable for everyone who has a very good understanding of planning the audit on the Draftworx methodology
We recommend that all partners and mangers attend this course
