Module 8: Audits for special circumstances
So far you have learned about the process for performing audits, from
accepting the engagement to reporting to shareholders or others. Module 8
covers some of the specific nuances of performing audits for consolidated
entities, not-for-profit enterprises, and public-sector entities, as well as of
using a second auditor. The basic process is the same for all these types of
audits; that is, you have to follow the generally accepted audit standards.
This includes accepting the engagement, obtaining an understanding of the
s business, establishing planning materiality, assessing risk, assessing
controls, gathering evidence, assessing the evidence, and preparing the
appropriate report. This module also considers the responsibilities of a
professional accountant when providing a second opinion on the application of
accounting principles to a specific transaction or the type of audit or review
opinion that may be rendered on an entity
s financial statements.
When you have completed this module, you will be able to determine, for the
special circumstances outlined in the module, whether or not to accept an
engagement, as well as the scope of the engagement. You will also be able to
evaluate risks, determine the impact of these risks on the engagement,
develop assurance procedures, and execute assurance programs in
accordance with professional standards, as related to auditing consolidated
statements, not-for-profit organizations, and the public sector.
Test your knowledge
Begin your work on this module with a set of
designed to help you gauge the depth of study required.
Evaluate the considerations and procedures for auditing consolidated
financial statements, including the standards required of the primary
auditor when relying on the work of a secondary auditor. (Levels 1 and
Explain the characteristics of not-for-profit organizations and their
audits, including planning considerations, audit evidence areas
(including revenue recognition) that require special consideration, and
opinion reporting considerations. (Level 2)
Explain the three types of public sector audits identified in the
assurance standards and recommend the applicable auditing standards
for compliance and value-for-money audits. (Level 2)
Determine the reasons for seeking a second opinion and outline the
procedures a public accountant follows when asked to provide one.
AU2 - Module 8