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Unformatted text preview: file:///F|/Courses/2010-11/CGA/AU1/06course/m03intro.htm Module 3: Audit objectives, evidence, procedures, and documentation Overview Module 3 explains 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. This module also covers 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. Assignment reminder: Assignment 1 in Module 5 is due at the end of Week 5 (see Course Schedule). You may wish to take a look at the assignment now to familiarize yourself with the requirements and to prepare for any work that may be required in advance. 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 Audit objectives 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 Specific audit objectives Explain the various types of management assertions and their relationship to specific audit objectives. (Level 1) 3.3 Audit evidence Explain how an auditor determines what and how much evidence is required. (Level 1) 3.4 Evidence-gathering audit procedures Identify 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 Documentation Explain the purpose and key elements of audit working papers, and describe the form and content of documentation required in a professional engagement. (Level 1) 3.6 Pre-engagement arrangements Identify the main pre-engagement activities and the factors to consider when deciding whether to accept a new audit engagement. (Level 1) 3.7 Engagement letters Describe the purpose and main features of an engagement letter. (Level 2) Module summary Print this module file:///F|/Courses/2010-11/CGA/AU1/06course/m03intro.htm (1 of 2) [04/10/2010 2:57:37 PM] file:///F|/Courses/2010-11/CGA/AU1/06course/m03intro.htm file:///F|/Courses/2010-11/CGA/AU1/06course/m03intro.htm (2 of 2) [04/10/2010 2:57:37 PM] 3.1 Audit objectives Learning objective Describe the auditor...
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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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module03 -...

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