module07 - Module 7: Practical considerations Overview The...

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Module 7: Practical considerations Overview The previous modules have guided you through the audit process, focusing on standards and procedures. You have learned about the technical components of an audit engagement in some detail. Module 7 covers special considerations that apply to the audit of small businesses, then looks at some important non-technical skills the "soft skills" of effectively managing audit engagements and interacting with client personnel and your own audit team members. Finally, you work through a comprehensive case analysis, which you should use as a study tool to ensure that you understand the audit process and can integrate the pieces appropriately. As you work through each section of the case, refer to the appropriate sections in prior modules. When you have completed this module, you will be able to apply skills related to communication, leading and developing teams, and coaching and training staff. The case study is a role-playing exercise that enables you to integrate material and practise skills you have learned in the first six modules. 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 7.1 State the characteristics of a small business and their effect on audit considerations. (Level 1) 7.2 Identify the roles and responsibilities of audit team members, and explain how non-technical skills contribute to engagement planning, management, and budgeting. (Levels 1 and 2) 7.3 Explain the methods of communication used to foster a positive audit team environment and the techniques for dealing with client personnel and difficult client situations. (Levels 1 and 2) 7.4 Explain how to effectively plan, manage, execute, and follow up a meeting, and compare and contrast planning and debriefing meetings. (Level 2) 7.5 Apply your knowledge and judgment in a comprehensive case study, and prepare the appropriate documentation as you work through the various audit steps. (Level 2) AU2 - Module 7 Page 1
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7.1 Small business audit issues Learning objective State the characteristics of a small business and their effect on audit considerations. (Level 1) Required reading AU2 Readings Book: Reading 7-1: Small business audit issues (Level 1) Reading 7-2: CGA-Canada s Auditing Guideline No. 7, Auditing owner- managed businesses (Level 1) Reading 7-3: CGA Small audit program (Level 1) LEVEL 1 Characteristics of small businesses Modules 1 to 6 outline an audit approach that could apply to any size of business; the auditing standards and process are the same for all businesses. However, small businesses may require different audit considerations because of their unique nature. While a small business can be defined by sales volume, number of employees, or size of operations, its other unique characteristics have a larger impact on the audit. International Auditing Practice Statement 1005 (CAPS 1005), "Special
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module07 - Module 7: Practical considerations Overview The...

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