You are on page 1of 5

Thumbnails Document Outline <http://www.cica.

ca/applying-the-standards/auditing-and-assurance/resources/item 72140.pdf#page=1> < 72140.pdf#page=2> < 72140.pdf#page=3> < 72140.pdf#page=4> < 72140.pdf#page=5> < 72140.pdf#page=6> < 72140.pdf#page=7> < 72140.pdf#page=8> < 72140.pdf#page=9> < 72140.pdf#page=10> < 72140.pdf#page=11> < 72140.pdf#page=12> < 72140.pdf#page=13> < 72140.pdf#page=14> < 72140.pdf#page=15> < 72140.pdf#page=16> < 72140.pdf#page=17> _GoBack < 72140.pdf#12-215_EN_Tool%20for%20Auditors_Accounting%20Estimates.indd%3AAnchor%3 A1> Find: Previous Next Highlight all Match case Toggle Slider Find Previous Next Page: of 17 Presentation Mode Open Print Download Current View < 72140.pdf#page=1&zoom=auto,0,612> Zoom Out Zoom In 1 Canadian Auditing Standards Implementation Practitioner Support â Auditing Accounting Estimates Under CASs: What, Why and How? There are many steps involved in auditing accounting estimates; find in this

during the planning phase or later during your audit. it expands on how CAS 315. PRACTITIONER SUPPORT CANADIAN AUDITING STANDARDS IMPLEMENTATION Implementation Tool for Auditors S TA nd A rd di SCUSSE d CAS 540. and related disclosures Auditing Accounting Estimates Under CASs: What. including fair value accounting estimates. It is easily detachable and useful as a reminder. If. â ¢ adopts a risk-based approach to the audit of accounting estimates. CAS 330 and other relevant CASs are to be applied to accounting estimates). nature and extent of work you need to complete. This Implementation Tool for Auditors ( Tool ) will help you implement the Canadian Auditing Standards (CASs) requirements for auditing accounting estimates. This implies understanding how management makes the estimates and the data on which they are based. CAS 540: â ¢ focuses auditorsâ attention on areas of higher risks in accounting estimates. as well as other specific elements listed in CAS 540. a list of the steps required in auditing accounting estimates. You will need to adapt the Tool to the specific circumstances of your audit engagement. â ¢ emphasizes the importance of professional skepticism and ensuring that appropriate attention is paid to indicators of possible management bias and their audit implications. you determine that there is a risk of material misstatement for a particular accounting estimate. The Tool provides. in a practical tabular format.Implementation Tool for Auditors a one-page diagram that shows the main steps required. you will need to assess the estimation uncertainty to determine the timing. Auditing accounting estimates. including fair value accounting estimates (in other words. Why and How? Implementation Tool for Auditors 2 Practitioner Support â Canadian Auditing Standards Implementation Diagram â Main steps in auditing accounting estimates under CAS 540 when a risk of material misstatement exists Step 5b Perf orm .

15-.29] oP erform Step 5a oP erform the further substantive procedures [CAS 540.10] Step 5a Evaluate application of re quirem ents of the AFRF. including control activities relevant to that risk [CAS 315.* consistency in m ethods and basis for changes .17] Step 1 Obtain an understanding of ma nage me nt process for accounting estim ates [CAS 540.procedures in response to identified significant risk s: oO btain an understand in g of the entity's controls.8] Step 3 Evaluate the degree of esti ma tion uncertainty [CAS 540.

12] Perf orm one or mo re of the four responses [CAS 540.18-.13-.[CAS 540.14] Step 2 Perf or m a retrospective review [CAS 540.10 and .9] Not high High Step 4 Determ ine if there is a significant ris k of m aterial mi sstatem ent [CAS 540.11] Significan t Not significant Step 6 Evaluate reasonableness of accounting estim ates and disclosures and identi fy wh ether there are indicators of possible ma nage me nt bias [CAS 540.21] Identification and assessment of risks of material misstatements .

for accounting estimates Response to assessed risks Ev aluation of reasonableness of estimates and management bia s A udit documentation and w ritten representation s Step 7 Obtain wr itten representations [CAS 540.22] Step 8 Docum ent audit file [CAS 540.23] *A FRF: A pplicable Financial Reporting Framework An accounting estimate that has a high degree of estimation uncertainty and a significant risk of material misstatement requires you to perform more audit procedures and to obtain a more robust understanding of the entityâ s controls. including control activi ties relevant to that risk. Implementation Tool for Auditors More Information Less Information Close .