AT: Completing the Audit and Audit Documentation PSA230__| Audit Documentation PSA STOR | Going Concern PSA 260R | Communication with TCWG PSA 520 _| Anaiytical Procedures ‘Audit Evidence — Specific PSAS01 | Considerations for Selected items |PSAS60__| Subsequent Events PSA550_| Related Parties PSA580_| Written Representations. 1. Identify lability tems not given appropriate accounting treatment ieee > Search for unrecorded liabilities > Loss Contingencies (Litigations and Claims) 2. Addressing required disclosures (through a disclosure checklist) » Related Parties » Going Concem > Subsequent Events 3, Overall Review and Formation of Opinion 4, Other wrap-up procedures > Representation Letter > Audit Documentation > Communication with TCWG Pron errs > Review subsequent cash disbursements > Analytical Procedures > Test unapproved invoices or open purchase orders (PO) > Inquiry with management and in-house legal counsel > Minutes of meetings w/ TCWG > Correspondence w! external legal counsel > Legal Expense Account > Legal Confirmation: © Likelihood/probabilty of outfow © Estimate of financial implications © General inquiry or spect inquiry recmeeue koe > Scope Limitation if: ‘© Management refuses to give the auditor permission to communicate w/ the entity's external legal counsel © The entity’s legal counsel refuses to respond appropriately to the letter of inquiryManagement Responsibility Identify and properly disclose Related Parties and Related Party Transactions Main Concer Adequacy of disclosure Possibility of Undisclosed Related Party(ies) > Abnormal Terms > Loans w/ no maturity or interest > Incomplete documentation, biased processing and approval Procedures > Review related tests of transactions and balances (Occurrence) > Review minutes of meetings of shareholders and directors > Review accounting records for large/unusual transactions, especially close to year- end > Review receivable/payable and bank confirmations > Review investment transactions Procedures > Review Prior Year working papers for names of known related parties (Completeness) > Review entity's procedures for identification of related parties > Inquire as to the affiliation of directors and officers w/ other entities > Review shareholder records to determine pr > Review minutes of the meetings of shareholders and board of directors (+ trace to accounting records) Inguire of other auditors (predecessor) currently involved in the aut Review information reported to regulatory agencies (BIR, SEC, etc.) Queries to the audit client fone iene > What is the purpose of the transaction? > Isit (properly) documented? > Isit approved by Board of Directors? > Are the amounts recorded reasonable? > Are the terms of the transaction comparable with those of non-related parties?Management's Responsibility Going Concer » To assess the appropriateness of the Going Concern Assumption > To identify events or conditions that would cast significant doubt related to > To disclose in the notes such events that constitute a material uncer ty vv Auditor's Responsibility To evaluate the management's assessment To conclude whether a material uncertainty exists » Toreport on the on the auditor’ findings, Did management make an assessment, and covered the appropriate period? Evaluate such assessment Request the management to do so, “Guaitedbiciaimer Were there any events or conditions that may ‘cast Significant doubt on entity's ably (0. Yes Evaluate whether thse represent ‘material uncertsiny Gna Conca appoint Evaluate whether management has migating pans (o access ose ‘oer ner) ona Cage gpronite ‘Going Concern Assungton appropriate, ul wi required FS disclosure Going Concer is inappropriate Continue as Going Concern? None Yes Were there any events or conditions identified representing material uncertainty? None Yen Wire there migating plans fro management that fave a reasonable oxpociaion of esclving mato neeraines?(Obtah spect wien representations fon tch pans) None Yes If Going Concer Assumption is inappropriate, were the FS prepared under alternative basis? No Yer priate, were sd Pe dedosues mae? If there are multiple material uncertainties significant to the FS, issue a Disclaimer of, OpinionDid management make an assessment? Were there events or conditions that may cast ‘significant doubt’ as to Going Concern Assumption? Were the events or conditions represents ‘material uncertainty’? Were there mitigating plans? If the Going Concern assumption is inappropriate, were the FS prepared under alternative basis? I Going Concern is appropriate, were the FS disclosures made? ‘Ace the multiple material uncertainties related to Going Concern? Bini — > Adjusting Events Type 1) Contions existing atthe date ofthe FS ero post’ [> Non-adjusting Events (Type 2) | Conditions that arose after the date of the FS > Events occurring between the date of the FS and the date of auditor's report ee > Facts that became known to the auditor after the date of the Auditor's Report Mlustration: Events ] Facts I Vf Date of FS Date of Bate off Date of the FS ‘Approval for Audi Issuance ‘Auditor's Report Dec. 31, 2023 Feb. 29, 2024 Mar. 31, 2024 and Auditor's Report Issuance TZ Auditing Purposes [BD Accounting Purposes Pc ia eee) Date of FS > Date at the end of the latest period covered by the FS. Date on which the FS has been prepared and those with recognized authority pate cL Approval ore) asserted that they have taken responsibility for those FS (Date of BoD approval) Date of Auditor's Report | > Last date on which the auditor has responsibility for auditing subsequent events (must not be earlier than FS Approval) Dated of FS and Auditor's | > Date on which the auditor's report and audited FS are made available to third Report Issuance parties tiie ity Events (Obtain Sufficient and Appropriate Audit Evidence (SAAE) about these events Understand management procedures. Inquire with management and TCWG. Read minutes of meetings after the FS date Read latest subsequent interim FS ‘Obtain Written Representations. RENEPrins Facts (Generally) No further obligation, except when relevant to FS and auditor's report Before the FS are issued to third parties ‘Aller the FS have been issued to third parties > Consider whether FS oe Discus the mater, need amendment rmanagoment an > Inquire how Have the FACTS existed a ofthe date of the auditor's report date? ee eee No rotnner obtgaton ort auater|| (Ott ee a omy the FS 1. Cary out necessary aut procedures: 2. Isue a New Audtors Report Management amends the FS Cary out necessary aud procedures [2 Review steps taken by management te nform anyone who lbreviously received te PS and Audtor's Report 3. tssue a New Aucitors Report iFissued othenvse, seek legal advice to prevent refance onthe report fr asaiorsRepare ot yet eave o Management and TONG, (nod eprom (ualiiediAdverse) rAuators Repor is already issued fo Management and TCWG, hotify them nat oissue If Management unwilling to ‘amends the FS (Notty management and TCWG of itertion fo seek actions to prevent future relance on the report Tf management and TOWG does not ‘ake the necessary sleps, seek legal fed ‘advice to prevent reliance on the report Picmkone ieee First, assess the importance (relevance to FS or Auditor’s Report) oy Perform the procedures (or ielent doesnot alow, alternative) consul egal counsel Auditor's Opinion ‘compromised? a «| ‘Similar to facts after auditor's report date Premcent eea 4. Single-dated_| > Subsequent Event Date 2.Dualdated | > Original Date > Subsequent Event Dateeee ties er ete Risk im To obtain an pose vent | Preliminary oman an = es To detect material NO (used in combination wi Risk Response | Substantive aera Assertion ena eee Concluding | To conclude on the FS FS = Cerne ed > Recorded amounts vs. Auditor's expectations » Required > If there are significant differences, investigate further by: © Inquiring with management © Performing necessary procedures (review of audit procedures) > Trend, ratio, reasonableness tests, regression analysis DSS ee > Witten statement By management > Addressed to the auditor > Confirming certain matters > Supporting other audit evidence > Source of audit evidence but not as: ‘© Substitute for other audit procedures © Sole source of evidence ———————» > Ifnot provided, significant issues may exist. Source of > Appropriate responsibilities for the FS and knowledge of the matters concerned Written » CEOICFO Representations | > Owner-manager (for small entities) TCWG, where appropriate > Date of Written | > As near as practicable, but not after the date of the auditor's report > Written Representation is like an Inquiry preserved in. a documentary format; Inquiry alone will not provide SAAE Representations | > Normally, same date as Auditor's Report Periods ‘All the FS and periods referred to in the Auditor’s Report Covered > Management reaffirms written representations made relating to prior periods Deena ace General Written Representations (Management's Responsibilities) ieraeeeeed neue eae Preparation of the FS, information provided and completeness of transactions Specific Items ‘a, When required by relevant PSAs b,_Necessary to support other audit evidence Scope When to obtain? | In all audits ‘Consequence if not obtained? Disclaimer of Opinion Qualified Opinion or Disclaimer of Opinionies fcaent es Preparedand | ay sppropiatelevelotmanagement | By he autor Aderessee | Actor tents manager Required? YES: NO Date Concurrent wil/Audiors Raper date | As tinaly ae practicable content onfimaton of represerations made PY | mye contl ses, potential mpac, 2 well SRE Cone eRe ‘as recommendations for improvement > Encourage better relationship between auditor and management > Suggest additional tax and management > Reminder of management ofits primary Importance responsibility for the FS > Can serve as audit evidence services List of ISAs containing requirements for Written Representations > ISA 240 par. 39 > 1SA.550 par. 26 > ISA 250 par. 16 > ISA560 par. 9 > ISA 450 par. 14 > ISA570 par. 16(e) > ISA501 par. 12 > ISAT10 par. 9 > ISA540 par. 22 Bee Performed all through out the audit aka “Audit Working Papers/Audit Workpapers” > Audit procedures performed Arecord of: > Relevant audit evidence obtained (sufficient and appropriate) > Conclusions that the auditor reached Owned by the auditor, in the absence of written agreement. (subject to confidentiality requirements) Primary ‘Support the auditor's opinion on FS Functions ‘Support the auditor's representation as to compliance wi PSAs Planning and performance of audit > > Review and supervision. Other Functions | > Accountability > > Reference for future audits Quality Control Inspections (|ntemalExternal) ‘Good audit workpapers “can stand by themselves” ¥ Client name and period-end ¥ Working paper ttle Form, content, Sign-offs (including dates): Patty Y, Working paper index or reference number 7 Preparer Documentation jectives ¥ Reviewer ¥ Procedures and tick marks ¥ Exceptions or resolutions, if any ¥ ConclusionsPete ete Guenenmenred > Significant matters (audit adjustments, internal control, fraud, etc.) should be documented. > When and with whom discussed > Minutes of the me » What are the alternative procedures performed? » How does the alternative procedure achieve the aim of the PSA requirement? » What are the reasons for the departure? Matters arising after the auditor's report date The circumstances encountered > The new or additional audit procedures performed, audit evidence obtained, and conclusions reached > Effect on the auditor's report > When and whom the changes were made and reviewed ‘Current Permanent Significance | Current period being audited Long-term Example __| Current year WP, PBC files related to audit | AOI, Long-term debt agreements, intemal control procedures, GL and SL files, audit program, | manuals, lease agreements, etc. ate, > Not guided by PSA. » “as long as you can organize your audit file in a manner understandable to the users” » Can be Index by Audit Phase, FS Area, etc. > Not more than 60 days after the date of the auditor’s report > No additional procedures/conciusion > Deleting/discarding superseded documentation > Sorting, collating, and cross-referencing workpapers > Sign-offs Eiiaeeenr PSQC 1 (PSA230, as well) > Atleast 5 years from the date of the auditor's report SEC, Revised SRC Rule 68__> Atleast 10 years from the date of the auditor's report Other Specific Documentation Requirements > PSA210 par. 10-12 > PSA315 par. 32 > PSA600 par. 50 > PSA 220 par. 24-25 > PSA 320 par. 14 > PSA610 par. 13 > PSA 240 par. 44-47 > PSA 330 par. 28-30 > PSA250 par. 29 > PSA450 par. 15 > PSA260 par. 23 > PSAS40 par. 23 > PSA300 par. 12 > PSA560 par. 28 > Auditor's Responsibilities > Planned scope and timing of the aucit > Significant findings from the audit (accounting treatment, difficulties, significant deficiencies, etc.) > Auditor's Independence