Chapter 13 Instructor's Guide

Chapter 13 Instructor's Guide - Chapter 13 Overall Audit...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 13 Overall Audit Plan and Audit Program Chapter 13 has been significantly rewritten to reflect the new Risk Assessment SASs (SAS Nos. 104-111). The chapter helps students see the connection between the newly defined “risk assessment procedures” and “further audit procedures” with the audit risk model introduced in Chapter 9. Much of the material in Chapter 13 is review and integration. The integration portion of the material is especially important. The types of tests are also critical. This chapter is a major one to help students tie the audit process together. The following are the areas we cover in the chapter: Chapter opening vignette Types of tests Impact of information technology on audit testing Evidence mix Design of the audit program Summary of key evidence-related terms Summary of the audit process To provide a frame of reference for discussing the chapter, we first refer students to Figure 8-1 (page 209), with emphasis on the bottom rectangle and its relationship to the rest of the items in the figure. (See Figure 8-1) Chapter Opening Vignette – “How Much and What Kind of Testing Will Get the Job Done?” This vignette presents a debate over the conflict between efficiency and effectiveness in doing audits. The auditor has an obligation to find material misstatements, but also to conduct the audit at the lowest possible cost. Clients want all misstatements, especially fraud, found, but they also want the audit fee to be low. They can't have it both ways. Additionally, introduction of the integrated audit required by PCAOB Standard 2 for public companies has significantly affected the mix of audit procedures that must be performed in audits of public companies. This vignette demonstrates that while tests of controls will be extensively performed in audits of public companies, substantive tests will continue to be performed in all audits of financial statements. Students can engage in this debate, and you can ask them how an auditor decides which procedures to do and which to forego. You can also discuss the tools auditors have to obtain both efficiency and effectiveness: e.g., audit risk model, statistical methods, computer processing, and computer models for assessing risk, developing programs, and accomplishing administrative tasks. 13-1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Types of Tests (page 404) First we define the five types of tests and help students understand that only four of those five represent “further audit procedures” as now defined by the Risk Assessment SASs. We remind students that “risk assessment procedures” are represented by the procedures auditors perform to assess inherent risk and control risk as described in Chapters 8 and 9. Auditors perform further audit procedures in response to the risks identified by the risk assessment procedures. We use Figure 13-1 (page 404) to help students see the connection between the four types of procedures that constitute further audit procedures to the components of the audit
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 10

Chapter 13 Instructor's Guide - Chapter 13 Overall Audit...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online