Completing the Audit

1) Identify and evaluate potential contingencies and commitments which may have an
effect on the financial statements.
“Litigation and claims involving the entity may have a material effect on the financial
statements and thus may be required to be disclosed or accounted for in the financial
statements”
PSA 501 (REDRAFTED) AUDIT EVIDENCE – SPECIFIC CONSIDERATIONS FOR
SELECTED ITEMS, PAR. 6, 9, 10. 11
“The auditor shall design and perform audit procedures in order to identify litigation and
claims involving the entity which may give rise to a risk of material misstatement,
including: (Ref: Para. A17-A19)”
PSA 501 (REDRAFTED) AUDIT EVIDENCE – SPECIFIC CONSIDERATIONS FOR
SELECTED ITEMS, PAR. 6, 9, 10. 11

2) Perform subsequent events procedures

“The auditor shall perform audit procedures designed to obtain sufficient appropriate
audit evidence that all events occurring between the date of the financial statements and
the date of the auditor’s report that require adjustment of, or disclosure in, the financial
statements have been identified.”
PSA 560 (REDRAFTED) SUBSEQUENT EVENTS, PAR. 2, 6

3) Review the reasonableness of management’s assessment of the use of the going concern
assumption.
“The auditor’s responsibilities are to obtain sufficient appropriate audit evidence
regarding, and conclude on, the appropriateness of management’s use of the going
concern basis of accounting in the preparation of the financial statements, and to
conclude, based on the audit evidence obtained, whether a material uncertainty exists
about the entity’s ability to continue as a going concern.”
“These responsibilities exist even if the financial reporting framework used in the
preparation of the financial statements does not include an explicit requirement for
management to make a specific assessment of the entity’s ability to continue as a going
concern.”
PSA 570 (REDRAFTED) GOING CONCERN, PAR. 6
4) Identify related parties and perform procedures to test related party transactions.
“The objectives of the auditor are:
A. Irrespective of whether the applicable financial reporting framework establishes
related party requirements, to obtain an understanding of related party relationships and
transactions sufficient to be able:
I. To recognize fraud risk factors, if any, arising from related party relationships
and transactions that are relevant to the identification and assessment of the
risks of material misstatement due to fraud; and”
II. To conclude whether the financial statements, insofar as they are affected by
those relationships and transactions:
a. Achieve fair presentation (for fair presentation
frameworks); or
b. Are not misleading (for compliance frameworks)
B. In addition, where the applicable financial reporting framework establishes related
party requirements, to obtain sufficient appropriate audit evidence about whether related
party relationships and transactions have been appropriately identified, accounted for and
disclosed in the financial statements in accordance with the framework.
SA 550 (REVISED AND REDRAFTED) RELATED PARTIES, PAR. 6 & 9

5) Obtain management representation letter.

“The auditor shall request written representations from management with appropriate
responsibilities for the financial statements and knowledge of the matters concerned.”
PSA 580 (REVISED AND REDRAFTED) WRITTEN REPRESENTATIONS, PAR. 6, 9, 14,
15

6) Performing final analytical procedures

“The auditor shall design and perform analytical procedures near the end of the audit that
assist the auditor when forming an overall conclusion as to whether the financial
statements are consistent with the auditor’s understanding of the entity.”
PSA 520 (REDRAFTED) ANALYTICAL PROCEDURES, PAR. 6 & 7
 “If analytical procedures performed in accordance with this PSA identify fluctuations or
relationships that are inconsistent with other relevant information or that differ from
expected values by a significant amount, the auditor shall investigate such differences by:
a. Inquiring of management and obtaining appropriate audit evidence relevant to
management’s responses; and
b. Performing other audit procedures as necessary in the circumstances.”
PSA 520 (REDRAFTED) ANALYTICAL PROCEDURES, (Ref: Para. A20- A21)

7) Reviewing working papers and drawing conclusions on results of audit procedures

performed.
“PSA 220 (Redrafted) requires the auditor to review the audit work performed through
review of the audit documentation. The requirement to document who reviewed the audit
work performed does not imply a need for each specific working paper to include
evidence of review. The requirement, however, means documenting what audit work was
reviewed, who reviewed such work, and when it was reviewed.”
PSA 230 (REDRAFTED) AUDIT DOCUMENTATION, PAR. A13
“On or before the date of the auditor’s report, the engagement partner shall, through a
review of the audit documentation and discussion with the engagement team, be satisfied
that sufficient appropriate audit evidence has been obtained to support the conclusions
reached and for the auditor’s report to be issued.” (Ref: Para. A18-A20)
PSA 220 QUALITY CONTROL FOR AN AUDIT OF FINANCIAL STATEMENTS, PAR. 17.
“The firm’s review responsibility policies and procedures shall be determined on the
basis that work of less experienced team members are reviewed by more experienced
engagement team members.”
PSQC 1, par. 33

8) Obtaining the approval of the client regarding disclosures and any adjustments made to
the financial statements.
“To provide those charged with governance with timely observations arising from the
audit that are significant and relevant to their responsibility to oversee the financial
reporting process.”
PSA 260 (REVISED) COMMUNICATION WITH THOSE CHARGED WITH
GOVERNANCE, PAR. A17
9) Review of other information or documents that contain the audited financial statements
and ascertain their consistency.
“Consider whether there is a material inconsistency between the other information and
the financial statements. As the basis for this consideration, the auditor shall, to evaluate
their consistency, compare selected amounts or other items in the other information with
such amounts or other items in the financial statements.”
PSA 720 (REVISED) THE AUDITOR’S RESPONSIBILITIES RELATING TO OTHER
INFORMATION, PAR. 14(A-25)

10) Review of other information or documents that contain the audited financial statements
and ascertain their consistency.
“Consider whether there is a material inconsistency between the other information and
the financial statements. As the basis for this consideration, the auditor shall, to evaluate
their consistency, compare selected amounts or other items in the other information with
such amounts or other items in the financial statements.”
PSA 720 (REVISED) THE AUDITOR’S RESPONSIBILITIES RELATING TO OTHER
INFORMATION, PAR. 14(A-25)
Additional: Evaluation of the overall financial statement presentation.
Review adequacy of disclosures using a disclosure checklist that lists all specific disclosures
required by GAAP and the SEC, if appropriate.