Mod03 - External Auditing[AU1 Module 3 Audit objectives evidence procedures and documentation Overview In Module 3 you learn the difference between

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Module 3: Audit objectives, evidence, procedures, and documentation Overview In Module 3, you learn the difference between the objective of an audit (which is to express an opinion on the financial statements) and specific audit objectives (which are to identify the relevant management assertions embodied in the financial statements and to ensure that those assertions are not materially misstated). You learn what is required for evidence to be sufficient and appropriate to afford a reasonable basis for supporting the content of the auditor's report, as well as the general audit procedures used to gather evidence. You also learn about the requirements for the form and content of working papers so that evidence can be properly documented, as well as pre-engagement activities. When you have completed this module, you should have a good understanding of both the auditor's and management's responsibilities. Throughout the module, you apply what you have learned about the audit objectives and evidence to mini-scenarios that outline situations faced by auditors. 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 3.1 Describe the auditor’s responsibility to consider fraud and error and the consequences of illegal acts in order to achieve the objective of financial statement audits. (Level 2) 3.2 Explain the various types of management assertions and their relationship to specific audit objectives. (Level 1) 3.3 Explain how an auditor determines what and how much evidence is required. (Level 1) 3.4 Describe and apply evidence-gathering audit procedures commonly used to obtain audit evidence, and describe the strengths and weaknesses of each procedure. (Level 1) 3.5 Explain the purpose and key elements of working papers in auditing, and describe the form and content of documentation required in a professional engagement. (Level 1) 3.6 Describe the main pre-engagement activities and the factors to consider when deciding whether to accept a new audit engagement. (Level 1) 3.7 Explain the purpose of an engagement letter and describe its main features. (Level 2) External Auditing [AU1] Page 1 of 22
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Learning objective c Describe the auditor's responsibility to consider fraud and error and the consequences of illegal acts in order to achieve the objective of financial statement audits. (Level 2) Required reading c Chapter 9, pages 345-346, "Auditor's Responsibility to Detect and Communicate Material Control Weaknesses and Misstatements" (Level 2) c Chapter 17, pages 688-689 (Level 2) c CICA Handbook — Assurance , paragraphs 5751.17-.19, and sections 5090, 5135, and 5136 (Level 2) c Reading 3-1: CGA AuG-8, "The auditor's responsibility for the detection and reporting of fraud and other irregularities" (Level 2) c Reading 3-2: CGA AuG-9, "The auditor's responsibility for the detection and reporting of illegal acts" (Level 2) LEVEL 1 Overall objective of an audit
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This note was uploaded on 10/27/2011 for the course ACCT 4263 taught by Professor Chaplin during the Spring '11 term at Fairleigh Dickinson.

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Mod03 - External Auditing[AU1 Module 3 Audit objectives evidence procedures and documentation Overview In Module 3 you learn the difference between

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