module08 - Module 8: Audits for special circumstances...

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Module 8: Audits for special circumstances Overview 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 client 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 test-your-knowledge questions designed to help you gauge the depth of study required. Learning objectives 8.1 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 2) 8.2 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) 8.3 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) 8.4 Determine the reasons for seeking a second opinion and outline the procedures a public accountant follows when asked to provide one. (Level 2) AU2 - Module 8 Page 1
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8.1 Audit of consolidated statements Learning objective 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 2) Required reading AU2 Readings Book: Reading 8-1: Auditing consolidated financial statements (Levels 1 and 2) CICA Handbook : Section 6930 (CAS 600) (Level 1) LEVEL 1
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module08 - Module 8: Audits for special circumstances...

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