aaa316_QRGs.pdf - Audit Assurance Chartered Accountants Program Quick Reference Guide 1.1 Elements of an assurance engagement RESPONSIBILITY

aaa316_QRGs.pdf - Audit Assurance Chartered Accountants...

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Quick Reference Guide 1.1 Elements of an assurance engagement RESPONSIBILITY Responsible party (e.g. directors) Underlying subject matter MEASURE/EVALUATE Measurer/ evaluator (e.g. management) Criteria Intended users ASSURE Engaging party (e.g. management) Terms of engagement Practitioner Assurance report Subject matter information (e.g. entity’s financial performance, financial position and cash flows) (e.g. financial statements) (e.g. auditor) (e.g. IFRS) Audit & Assurance Chartered Accountants Program Page 1 of 1 Quick reference guide 1.1 – Elements of an assurance engagement
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Quick Reference Guide 1.2 Professional Scepticism and Professional Judgement Audit & Assurance Chartered Accountants Program Page 1 of 1 Quick reference guide 1.2 – Professional Scepticism and Professional Judgement Professional scepticism (ISA 200 para. 15) Must plan and perform the audit with professional scepticism to avoid: (para. A19) Overlooking unusual circumstances Over generalising when drawing conclusions. Using inappropriate assumptions Therefore need to be alert for: (para. A18) Audit evidence that contradicts other evidence obtained Information that brings into question the reliability of documents and responses to enquiries Conditions that may indicate possible fraud Circumstances that suggest the need for audit procedures in addition to those required by the ISAs   The auditor must: Critically assess evidence (para. A20) Consider the reliability of information to be used as audit evidence (para. A21) Professional judgement (ISA 200 para. 16) Must exercise professional judgement to plan and perform the audit. Professional judgement is based on: The auditor having necessary competencies (from training knowledge and experience) (para. A24) Facts and circumstances known to the auditor and consultation on difficult matters (para. A25) Competent application of auditing and accounting principles (para. A26)   Is used throughout the audit but is necessary to use when making decisions on: (para. A23) Materiality and audit risk The nature, timing and extent of audit procedures used to gather audit evidence Evaluating whether sufficient appropriate audit evidence has been obtained The evaluation of management’s judgments. The drawing of conclusions based on the audit evidence obtained (e.g. assessing the reasonableness of management estimates) It must be documented (para. A27)
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Quick Reference Guide 2.1 Elements of quality control Monitoring Establish a monitoring process to provide assurance that the quality control policies and procedures are relevant, adequate and operating effectively Evaluation of quality control system − each engagement partner must have one completed engagement inspected Communication of deficiencies in quality control together with remedial action recommendations Engagement performance Policies and procedures to assure engagements are performed in accordance with professional standards and legal requirements Work of less experienced staff must be reviewed by more experienced staff
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