AAA316_Application video 1 slides only.pdf - Audit Assurance Application video 1 Audit planning and risk assessment Chartered Accountants Program

AAA316_Application video 1 slides only.pdf - Audit...

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Audit planning and risk assessment Audit & Assurance Application video 1
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Chartered Accountants Program Session outline Discuss the planning stage of an audit Focus on risk assessment, including Materiality Identifying risks Understanding their impact on materiality and the audit plan The approach: Exam style question Answer the required: Understand what is being asked Revisit content Use Q&A 2
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Chartered Accountants Program The Whyn Store 3
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Required
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Chartered Accountants Program a)Determinethe most appropriate benchmark upon which to calculate overall materiality. Justifyyour selection.b)Identifyand explain the risks of material misstatement which would impact on the audit plan, and for each risk explainhow it would impact on performance materiality.Required 5
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Chartered Accountants Program Stages of an audit Adapted from: IFAC Guide, Vol 1, p. 34 6
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Chartered Accountants Program YO U R T U R N 7 When does audit planning occur? Before the audit startsAt the beginning of the auditThroughout the auditII
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Chartered Accountants Program Adapted from: IFAC Guide, Vol 1, p. 42 8 Risk assessment stage
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Chartered Accountants Program Risk Assessment Stage Perform preliminary engagement activities Plan the audit Perform risk assessment 3 key activities undertaken in this stage: Assess the risk of material misstatement by understanding business and fraud risks design / implementation of controls Develop an overall audit strategy and audit plan for the engagement gather information about the client discuss with the audit team, and determine materiality Decide whether to accept or continue the engagement 9
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Chartered Accountants Program Risk Assessment Stage Perform preliminary engagement activities Activity 1: Decide whether to accept or continue the engagement 10
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Chartered Accountants Program Risk Assessment Stage Perform preliminary engagement activities Plan the audit Perform risk assessment 3 key activities undertaken in this stage: Assess the risk of material misstatement by understanding business and fraud risks design / implementation of controls Develop an overall audit strategy and audit plan for the engagement gather information about the client discuss with the audit team, and determine materiality Decide whether to accept or continue the engagement 11
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Chartered Accountants Program Risk Assessment Stage Plan the audit Activity 2: Develop an overall audit strategy and audit plan for the engagement gather information about the client discuss with the audit team, and determine materiality 12
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