Summarised Auditing Standards (INT)

[Ash123]

We all knw

A Question or two relates to Auditing Standards in F8 Paper
and

We also knw

How Hectic it is 2 go through a Whole Standard..

So Dis Topic is for

SUMMARISED AUDITING STANDARDS in view of Students!

So go ahead...
Post wat u knw of ISAs!

Regards Ash

[Ash123]

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[Ash123]

ISA 230 AUDIT DOCUMENTATION


Standards deals with Guidance on audit documentation
Appendix lists of other ISAs requirement of subject specific documentation


Laws and regulation may establish additional documentation requirements.

Definition as PEr standard
Audit documentation means the records of
audit procedures performed,
relevant audit evidence obtained and
conclusion the auditor reached.

Other Terms As Per Standard
Terms such as 'Working Papers' or 'Workpapers'

Primary Principle Of Standard
The auditor should prepare, on a timely basis, audit docmentation that provides the following two citeria:
1. A sufficient and appropriate record of the basis for the auditor's report, and
2. Evidence that the audit was performed in accordance with ISAs and applicable legal and regulatory requirements.

Nature of Audit Documentation
Method of Recording
Recorded on Paper or an electronic media or other media

Documented Items
Audit Programs, analyses, issues memoranda, summaries of significant matters, letters of confirmation and representation, checklists and correspondance (e-mails)concerning signifcant matters.

Abstracts or copies of the entity's records, e.g significant and specific contracts and agreements, may be included as part of audit documentation if considered appropriate.

THe AD for a specific audit engagement is assembled in an audit file.

Note to Remember
Audit documentation is NOT a substitute for the entity's accounting records.


Continued....

[Hamdy Hafez]

thanks Ash for the good work you did
but what about your June 08 exams results?????
& if you please can you confirm that if the current F8 syllabus for Dec 08 are not changed, as the same as June 08 syllabus
or we need to update our materials , please I'll wait for reply:err:

[Ash123]

Well not dat i knw of!

There could be sme changes in ISAs but dnt worry will post it here if anything like so!


Regards
Ash

Well i cleared 2 papers of my Essential Module P1 n P3!

Attempting the next!

[Ash123]

http://www.frc.org.uk/apb/publications/pub1282.html

Do check them out..
Listed here are all the standards that have been issued, revised or redrafted!

IAASB Clarity Project – Status Report on Individual ISAs at 17 July 2008

Regards
Ash

[Hamdy Hafez]

http://www.frc.org.uk/apb/publications/pub1282.html

Do check them out..
Listed here are all the standards that have been issued, revised or redrafted!

IAASB Clarity Project – Status Report on Individual ISAs at 17 July 2008

Regards
Ash

thanks a lot (you know your friend on the hard time - the bad one who is leave you alone)

[Ash123]

... Continued..

Importance of Audit Documentation

Preparing sufficient & appropriate audit documentation on a timely basis helps
1. EnhanceQuality of the audit
2. Facilitates effective review
3. Evaluation of audit evidence obtained
4. Evaluation of conclusion reached before the auditor's report is finalised.

Note: AD prepared at the time the work is performed is likely to be more accurate than documentation prepared subsequently.

Purpose of AD


Assisting the audit team to plan and perform the audit

Assisting MEMBERS of audit team to discharge their review responsibilities as per ISA 220. (Members responsible to direct and supervise audit work)

Enabling the audit team to be accountable for its work

Retaining a record of matters of continuing significance to future audits

Enabling an EXPERIENCED AUDITOR to conduct external inspections in accordance with applicable legal, regulatory or other requirements

Enabling an EXPERIENCED AUDITOR to conduct quality control review and inspections as per ISQC 1


Form Content & Extent of AD

Factors FC&E depends upon


Nature of audit procedures to be performed.
Identified Risks of material misstatement
Extent of judgement required in performing the work & evaluating results.
Significance of audit evidence obtained
Nature & extent of exceptions identified
Audit methodology and tools used.


Note to Remember:
It is neither necesssary nor practical to document every matter the auditor considers during the audit

ORAL EXPLANATION
Oral explanation by auditor do not represent adequate support for the work the auditor performed or conclusions the auditor reached.

Such Explanation maybe used to explain or clarify information contained inthe AD

Significant Matters
The auditor should document discussions of significant matters with management and others on a timely basis.

Completion Memorandum
The auditor may consider it helpful to prepare and retain as part of AD,
a summary that describes the significant matters identified during the audit and how they were addressed.
Or they could include cross-reference to other relevant supporting AD that provides such information.
This summary is known as Completion Memorandum

Identification of Preparer & Reviewer
In documenting the nature, timing & Extent of audit procedures performed, the auditor should record:


Who prepared the audit work,
Date such work was completed
Who reviewed the audit work
Date & Extent of such REview

[Hamdy Hafez]

Dear brother
good work please move on, I'll catch you soon, may be next sunday (a new thread here, but I think it will be related to your current thread)

[Hamdy Hafez]

Please we need to complete this thread, because really it's a very useful topic

Wait for your reply

[Ash123]

Provides guidance on the auditor's responsibility to consider laws & regulation in an audit of financial statements.

The auditor should recognise that NON-COMPLIANCE with laws and regulations may materially affect the financial statements.

Recognise this when designing and performing audit procedures and
In evaluating and reporting the results thereof.

Remember: An audit CANNOT DETECT non-compliance with All Laws and Regulations.

NON-COMPLIANCE: refer to acts of omission or commission by the entity being audited,
either intentional or unintentional,
which are contrary to the prevailing laws or regulations.

Non-Compliance Acts: Include transactions entered into by entity,
or on its behalf by its management or employees
Does not include personal misconduct

AUDITORS JUDGEMENT: Whether an act constitutes non-compliance is a LEGAL matter that may be beyond the auditor's professional competence,
Although the auditor may have a fair idea in many cases through his knowledge and training.
Ultimately such matters can only be decided by a court of law.

RESPONSIBILTY OF COMPLIANCE:Management are responsible for ensuring a client's operations are conducted in accordance with laws and regulations.

POLICIES & PROCEDURES: Following policies & procedures may help management discharge its responsibilities for PREVENTION & DETECTION of non-compliance:


Monitor legal requirements
Institute and operate appropriate systems of internal control.
Develop, publicise & follow code of conduct.
Ensure employees properly trained/understand code of conduct
Monitor compliance with code of conduct/disclipe employee who fail to comply.
Engage legal advisors to assit in monitoring legal requirements.
Maintain a register of significant laws to be complied with


....Continued

[Ash123]

Requirement of ISA 250
Requires the auditor to:
1. Plan & perform the audit with an attitude of professional scepticism
2. Recongnise that the audit may reveal conditions or events that would lead to questionning whether an entity is complying with laws & regulations.

Procedures performed by auditor to help identify instances of NON-COMPLIANCE
1. Obtain an understanding of the relevant legal and regulatory framework
2. Inspect relevant correspondence with authorities
3. Make inquiries of directors
4. Obtain written confirmation from directors

Example of circumstances that migt indicate non-compliance with laws and regulations
1. Payments of abnormally high agents fees in relation to services
2. An ongoing governmental investigation into some of the entities operations
3. Unsual payment in cash
4. Payment of fines or penalties
5. Purchases at prices significantly different to market price
6. unusual transactions with companies registeredin tax havens
7. Pyaments without proper exchnage control documentation.
8. Unauthorised transactions
9. Comment in the media
10. Accounting system that fails to provide adequate audit trail ot sufficient evidence

Audit procedures when non-compliance is discovered:
1. Understand the nature of the act
2. Understand the circumstances in which it has occured
3. obtain sufficient other information to evaluate the possible effect on the financial statements
4. Document their findings
5. Report their findings

Reporting non-compliance:
The auditr must report non-compliance to the managements

Also consider reporting to shareholders and third parties.

When reporting to shareholders consider implication on audit opinion, possible disagreement or limitation of scope.

When reporting to third parties need to bear in mind the duty of confidentiality but also duty to public interest.

[Hamdy Hafez]

please to continue complet this good work:GEEK:

[esoluyemo]

Ash 123,

Thank you so much for the wonderful job.

[Ash123]

Hello every1!

sorry 4 such a delay of advancing dis topic!

Since i hve completed my ACCA and passed my P7 Advance Audit & Assurance!

so Inshallah will start posting summaries of standards here!

GOOD Luck 2 every1 attempting F8 this session! ;)

Regards
Ash

[sha-bee]

This is a really helpful thread.
Anyone want to share about:

1.Audit Evidence (ISA 500)
2.Analytical Procedures (ISA 520)?

[Ash123]

Sorry guys, was away with my CFA exams! Once done with those will restart this thread.

Regards!
and my apologize