Responding to assessed risks evaluating audit evidence Consider the potential

Responding to assessed risks evaluating audit

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Responding to assessed risks - evaluating audit evidence Consider the potential impact of identified misstatement on the audit Evaluating misstatements Quantity of audit evidence If RMM assessment changes, design and perform further procedures Sufficiency Relevance - connection between audit procedure and assertion being considered Reliability of audit evidence Appropriateness Sufficient appropriate audit evidence From external independent sources Controls over preparation of evidence are effective Obtained directly by the auditor, rather than indirectly or by inference In documentary form rather than verbal Obtained from original documents Reliability of audit evidence is increased when: Do findings change the initial risk assessment at the assertion level? If not, attempt to obtain further audit evidence Has sufficient appropriate audit evidence been obtained? Form the auditor’s opinion Responses to assessed RMM at the financial statement level The linkage between procedures and assessed risks at the assertion level The result and conclusions arising from audit procedures Document Process of evaluating audit evidence Does the audit strategy and plan need to be revised? Evaluate the effect of uncorrected misstatements on the financial statements Are individual or aggregated misstatements material? Consider size and nature Consider whether misstatements are indicative of fraud Modify or perform additional procedures Consider whether there is an impact on other aspects of the audit Concerns over reliability of audit evidence Critically assess audit evidence Be alert to audit evidence that might contradict other audit evidence Be prepared to question the authenticity of documents Challenge management’s assumptions and judgements Remain alert to conditions that could indicate fraud Professional scepticism
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Using the work of others, external confirmations and written representations Positive confirmation requests Negative confirmation requests Written representations regarding management’s responsibilities Written representations required under ISAs Written representations required to support other audit evidence External confirmations ISA 505 Determine significant components Set ‘component materiality’ Consider ethical requirements (e.g. Independence) Consider professional requirements Understand consolidation process and group-wide controls Using component auditors ISA 600 Evaluate the internal audit function: Using the work of internal auditors ISA 610 Objectivity (ISA 610 para. A7) Technical competence (ISA 610 para. A8) Use of systematic and disciplined approach (including quality control) (ISA 610 para. A11) Evaluate the adequacy of an expert’s work: Using the work of experts ISA 620 Consider the consistency of the expert’s work with other audit evidence The methods and assumptions used The source data used and whether it is accurate Written representations ISA 580
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Subsequent events and going concern Material uncertainty?
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