A proper understanding of the practical application of auditing standards is key to ensure that sufficient appropriate audit evidence is received and documented on which to base your opinion. A majority of audit findings are on the planning section of an audit file, which indicates a lack of understanding of the documentation requirements. Incorrect planning can also lead to over or under auditing and lead to an opinion that is not supported by proper evidence. This session aims to provide delegates with a practical understanding of the application of the auditing standards as well as the CaseWare Probe Audit Methodology, and importantly the documentation requirements to ensure audit quality.
This course will cover the whole audit process with a detailed look at the following: • Objective of the auditor • Professional judgement and professional skepticism • Assertions • Overall materiality vs Performance materiality • Inquiries, analytical procedures and observations and inspection • Information from Other Sources • Obtaining an Understanding of the Entity and Its Environment, the Applicable Financial Reporting Framework, and the Entity’s System of Internal Control o Entity and its environment o Organisational structure and ownership o Governance o Business Model o Industry factors o Other external factors o The Applicable Financial Reporting Framework • Understanding the Components of the Entity’s System of Internal Control o Control environment o The entity’s risk assessment process o The entity’s process to monitor the system of internal control • Identifying and Assessing the Risks of Material Misstatement o Assessing the risks of Material Misstatement at the Financial Statement Level o Inherent risk o Fraud risk o Assessing Risks of Material Misstatement at the Assertion Level • Relevant assertions • Spectrum of inherent risk • Significant Risks vs insignificant risks • When substantive procedures alone cannot provide sufficient appropriate audit evidence • Disclosures that may be significant • Control Risk o Definitions o The information system and communication o Control activities o Evaluating the design, and determining implementation, of identified controls in the control activities component • Test of Controls • Reporting of Control Deficiencies Within the Entity’s System of Internal Control • Revision of Risk Assessment • Responding to the Risk of Material Misstatement in terms of the new ISA 315 o Substantive Procedures o Substantive Procedures Related to the Financial Statement Closing Process o Substantive Procedures Responsive to Significant Risks • Evaluating the Audit Evidence Obtained from the Risk Assessment Procedures • Classes of Transactions, Account Balances and Disclosures that Are Not Significant, but Which Are Material • Audit evidence • Engagement Team Discussion • Documentation • Communicating with management • Related party testing • Going concern • Subsequent events • Final/Overall analytical review • Evaluations of misstatements • NOCLAR and reporting responsibilities • Deciding on the type of opinion and setting up the audit report i.r.o. the new revised ISA 700 The following CaseWare documents will be dealt with during the course. 10.20 Engagement evaluation 10.30 Discussion with those charged with governance 10.50 Gathering information 10.51 Types and volumes of transactions 10.52 Preliminary analytical review 10.53 Understanding of accounting estimates 10.55 Understanding of the IT environment 10.60 Overall materiality assessment 10.10 Risk analysis summary 11.20 Inherent risk assessment 11.25 Fraud risk assessment 11.30 Evaluation of the system of internal control 11.50 Information system and control activities 11.60 Risk assessment at assertion level 12.20 Audit plan and strategy 02.10 Subsequent events 02.20 Going Concern conclusion 02.22 Subordination agreements 02.30 Overall analytical review 02.40 Evaluation of misstatements 02.90 Report to management 02.92 Letter of representation 90.20 Substantive testing worksheet 90.30 Controls testing worksheet We will also work through the following work programmes 700.10 Revenue work program 430.10 Trade receivables work program
All members of an engagement team who will be performing assurance engagements form partners to first year employees.
