RSM 323 Lecture _5 - Audit Planning Memo Considerations Handout

RSM 323 Lecture _5 - Audit Planning Memo Considerations Handout

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LH Fall 2010 Page 1 of 2 Audit Planning Memo Considerations Lecture #5 Handout Risk, Approach, Materiality, Procedures (RAMP) Checklist The RAMP checklist should not be used as a template. Based on the case facts given, you should go through this list in order to determine what is appropriate to be discussed (and what isn’t!). Risk of Material Misstatement o This is the assessment of risk for the overall audit which can be assessed as high, moderate or low based on your support o If it is a continuing engagement, your assessment can say higher or lower as long as you are told what the assessment was in the prior year in the case facts o Things to consider when assessing the overall risk of material misstatement: Users (new and existing) First time audit Timing Going concern Overall complexity of the business, accounting transactions etc. Management integrity Previous auditors Competency issues Any other issue that is pervasive Approach o To determine the overall approach for the audit, it is usually required that you first assess control risk on an overall basis o Based on your control risk assessment, determine the overall approach (combined
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RSM 323 Lecture _5 - Audit Planning Memo Considerations Handout

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