View
7
Download
0
Category
Tags:
Preview:
DESCRIPTION
Auditing Theory
Citation preview
GENERAL FLOWCHART OF AUDIT
ISSUE AUDIT REPORTISSUE AUDIT REPORTEvaluate audit risk
PERFORM SUBSTANTIVE TESTPERFORM SUBSTANTIVE TESTEstablish detection risk
UNDERSTAND & TEST INTERNAL CONTROLUNDERSTAND & TEST INTERNAL CONTROLAssess control risk
PLAN THE AUDITPLAN THE AUDITAssess inherent risk
PLANNING PHASE
CONFIRM AUDITARRANGEMENTSCONFIRM AUDITARRANGEMENTS
ASSESSINHERENT RISK
ASSESSINHERENT RISK
ESTIMATERELIANCE ON
INTERNALCONTROL
ESTIMATERELIANCE ON
INTERNALCONTROL
ESTABLISHPLANNING
MATERIALITY
ESTABLISHPLANNING
MATERIALITY
PERFORMANALYTICALPROCEDURES
PERFORMANALYTICALPROCEDURES
IDENTIFYPOTENTIAL
PROBLEM AREAS
IDENTIFYPOTENTIAL
PROBLEM AREAS
DEVELOP ANAUDIT STRATEGY
DEVELOP ANAUDIT STRATEGY
PREPARE THEAUDIT PROGRAM
PREPARE THEAUDIT PROGRAM
SCHEDULE THEAUDIT WORK
SCHEDULE THEAUDIT WORK
SUCCESSOR & PREDECESSORSUCCESSOR INITIATES
COMMUNICATION
OBTAINS PERMISSION FROMPROSPECTIVE CLIENT TO INQUIRE
OF PREDECESSOR
CLIENTRESPONSE
INQUIRIES OF PREDECESSOR AS TO:Integrity of managementDisagreements with managementReasons for change
CONSIDER REJECTINGPROSPECTIVE CLIENT
NO
YES
The work is to be adequately planned andassistants, if any are to be properly supervised
An audit should be planned with an attitude of PROFESSIONAL SKEPTICISM:
The auditor assumes that management is neither honest ordishonest.
THROUGHOUT THE PLANNINGPROCESS THE AUDITOR SHOULD
CONSIDER FRAUD RISK FACTORS
IN PLANNING THE AUDIT, ANAUDITOR SHOULD CONSIDER:
Inherent riskAnticipated reliance on internalcontrolPreliminary judgment aboutmaterialityPotential problem areas in thefinancial statementsType of audit report anticipatedP
LAN
NIN
G P
HA
SE
ERRORS
UNINTENTIONAL MISSTATEMENTS OROMISSIONS OF AMOUNTS OR
DISCLOSURES.
UNINTENTIONAL MISSTATEMENTS OROMISSIONS OF AMOUNTS OR
DISCLOSURES.
MISTAKES INGATHERING OR
PROCESSINGACCOUNTING DATA
MISTAKES INGATHERING OR
PROCESSINGACCOUNTING DATA
MISINTERPRETATION OR OVERLOOKFACTS, CAUSING
ACCOUNTINGESTIMATES TO BE
INCORRRECT
MISINTERPRETATION OR OVERLOOKFACTS, CAUSING
ACCOUNTINGESTIMATES TO BE
INCORRRECT
MISTAKES INAPPLICATION OF
ACCOUNTINGPRICIPLES RELATING
TO AMOUNT,CLASSIFICATION,
MANNER OFPRESENTATION, OR
DISCLOSURE
MISTAKES INAPPLICATION OF
ACCOUNTINGPRICIPLES RELATING
TO AMOUNT,CLASSIFICATION,
MANNER OFPRESENTATION, OR
DISCLOSURE
FRAUD
INTENTIONAL MISSTATEMENTS OROMISSIONS OF AMOUNTS OR
DISCLOSURES IN FINANCIAL STATEMENTS.
INTENTIONAL MISSTATEMENTS OROMISSIONS OF AMOUNTS OR
DISCLOSURES IN FINANCIAL STATEMENTS.
MANIPULATION,FALSIFICATION, OR
ALTERATION OFACCOUNTINGRECORDS ORSUPPORTINGDOCUMENTS
MANIPULATION,FALSIFICATION, OR
ALTERATION OFACCOUNTINGRECORDS ORSUPPORTINGDOCUMENTS
MISINTERPRETATIONOR INTENTIONAL
OMISSION OFDISCLOSURES OF
EVENTS,TRANSACTIONS, OROTHER SIGNIFICANT
INFORMATION.
MISINTERPRETATIONOR INTENTIONAL
OMISSION OFDISCLOSURES OF
EVENTS,TRANSACTIONS, OROTHER SIGNIFICANT
INFORMATION.
INTENTIONALMISAPPLICATION OF
ACCOUNTINGPRINCIPLESREATING TOAMOUNTS,
CLASSIFICATION,MANNER OF
PRESENTATION, ORDISCLOSURE.
INTENTIONALMISAPPLICATION OF
ACCOUNTINGPRINCIPLESREATING TOAMOUNTS,
CLASSIFICATION,MANNER OF
PRESENTATION, ORDISCLOSURE.
ERRORS & FRAUD
AUDITORS RESPONSIBILITY
DESIGN & PERFORM AUDIT TO PROVIDE REASONABLE ASSURANCEDESIGN & PERFORM AUDIT TO PROVIDE REASONABLE ASSURANCE
OPINION IS BASED ON REASONABLE ASSURANCE, AUDITOR NOT ANINSURER
OPINION IS BASED ON REASONABLE ASSURANCE, AUDITOR NOT ANINSURER
SUBSEQUENT DISCOVERY OF MATERIAL MISSTATEMENT DOES NOT,IN & OF ITSELF, EVIDENCE INADEQUATE PLANNING, PERFORMANCE,
OR JUDGMENT
SUBSEQUENT DISCOVERY OF MATERIAL MISSTATEMENT DOES NOT,IN & OF ITSELF, EVIDENCE INADEQUATE PLANNING, PERFORMANCE,
OR JUDGMENT
ASSESS RISKASSESS RISK
GENERAL FLOWCHART OF AUDITPLANNING PHASESUCCESSOR & PREDECESSORSlide 4ERRORSFRAUDERRORS & FRAUD
Recommended