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CSA 200 INTRODUCTION purpose of this International Standard on Auditing (ISA) is to establish standardsd in conjunction with ISA 120

'Framework of Internationalopinion enhances the credibility of the financial statements, thebehavior; and.dit procedures deemed necessary in therdance with ISAs is designed to provide reasonable assurance that thetaken as a whole are free from material misstatement. Reasonablerance relates to the whole audit process.are inherent limitations in an audit that affect the auditors ability to detectthe drawing of conclusions based on the audit evidence gathered, for example,in ISAs identify specified procedures whichccurred.ent of the entity. The audit of the financial statements does not relieveof this Cambodian Standard on Auditing (CSA) is to establish standards andent with the client; andded to assist the auditor in the preparation of engagement letters relatingt letters are usually appropriate.tive and scope of an audit and the auditors obligations aret of both client and auditor that the auditor sends an engagement letter,ect to the engagement. The engagement letter documents andcontent of audit engagement letters may vary for each client, but they wouldditor may also wish to include in the letter:ant, the following points could also be made:ditor of a parent entity is also the auditor of its subsidiary, branch or divisionether imposed by management or caused by circumstances. The auditoresting a change in the engagement. In contrast a change wouldavoid confusing the reader, the report would not includets of income and cash flows for the year then ending. We are pleased tot by means of this letter. Ourr audit in accordance with Cambodian Standards on Auditing. Thosessessing the accounting principles used and significantt of the company. This includes the maintenancebilled as work progresses, are based on the time requiredthis Cambodian Standard on Auditing (CSA) is to establish standards andans the material (working papers) prepared by and for, or obtained andnnection with the performance of the audit. Working paperspapers:e of the audit;f the audit work; andent, together with the auditors conclusion thereon. In areas involvingpapers is a matter of professional judgment since it is neitherr practical to document every matter the auditor considers. In assessing thetaken but not the detailed aspects of the audit. That other auditord content of working papers are affected by matters such as the:nt.esigned and organised to meet the circumstances and the auditorsTo improve audit efficiency, the auditor may utilise schedules, analyses and otherproperty of the auditor. Although portions of or extracts fromthis Cambodian Standard on Auditing (CSA) is to establish standards andmay involve:'error' refers to unintentional mistakes in financial statements, such as:d cannot be held responsible for the prevention of fraud and error.knesses in the design of the accounting and internal control systems andxtent, error may not be detected. The subsequent discovery of materialsic principles and essential procedures of an audit. Whether theAn audit is subject to the unavoidable risk that some material misstatements of thet. Certain levels of n the financial statements. If the auditor believes the indicatedd error indicated;r is an isolated occurrence. If necessary, the auditor adjusts thePerforming modified or additional procedures would ordinarily enable the auditor toor corrected in the financial statements. The auditor shoulded in management representations. The implications of particularnt. In most cases involving fraud, it would be appropriate to reportrtain circumstances, the duty of confidentiality is overriddencourts of law. The auditor may need to seek legal advice in suchffect the auditors conclusion include the implications of uch conclusion, the auditor would ordinarily seek legalthat apply relating to such disclosure. If there are any such reasons or

The quality of earnings is deteriorating, for example, increased risk takingwith respect to credit sales, changes in business practice or selection of accountingpolicy alternatives that improve income. The entity needs a rising profit trend, due to the demands of shareholders. The entity has a significant investment in an industry or product line noted forrapid change. The entity is heavily dependent on one or a few products or customers. Financial pressure on top managers. Pressure is exerted on accounting personnel to complete financial statementsin an unusually short time period. Unusual transactions Unusual transactions, especially near the year - end, that have a significanteffect on earnings. Complex transactions or accounting treatments.

Transactions with related parties. Payments for services (for example, to lawyers, consultants or agents) thatappear excessive in relation to the services provided. Problems in obtaining sufficient appropriate audit evidence Inadequate records, for example, incomplete files, excessive adjustments tobooks and accounts, transactions not recorded in accordance with normalprocedures and out of balance control accounts. Inadequate documentation of transactions, such as lack of properauthorisation, supporting documents not available and alteration to documents(any of these documentation problems assume greater significance when theyrelate to large or unusual transactions). An excessive number of differences between accounting records and thirdparty confirmations, conflicting audit evidence and unexplainable changes inoperating ratios. Evasive or unreasonable responses by management to audit inquiries. Some factors unique to a computer information systems environment which relate to theconditions and events in described above include: Inability to extract information from computer files due to lack of, ornoncurrent, documentation of record contents or programs.

Large numbers of program changes that are not documented, approved andtested. Inadequate overall balancing of computer transactions and data bases to thefinancial accounts. CSA 300 Introduction 1. The purpose of this Cambodian Standard on Auditing (CSA) is to establish standardsand provide guidance on planning an audit of financial statements. This CSA isframed in the context of recurring audits. In a first audit, the auditor may need toextend the planning process beyond the matters discussed herein.2. The auditor should plan the audit work so that the audit will be performed in aneffective manner. 3. 'Planning' means developing a general strategy and a detailed approach for theexpected nature, timing and extent of the audit. The auditor plans to perform the auditin an efficient and timely manner. Planning the Work 4. Adequate planning of the audit work helps to ensure that appropriate attention isdevoted to important areas of the audit, that potential problems are identified and thatthe work is completed expeditiously. Planning also assists in proper assignment of work to assistants and in coordination of work done by other auditors and experts.5. The extent of planning will vary according to the size of the entity, the complexity of the audit and the auditors experience with the entity and knowledge of the business.6. Obtaining knowledge of the business is an important part of planning the work. Theauditors knowledge of the business assists in the identification of events, transactionsand practices which may have a material effect on the financial statements.7. The auditor may wish to discuss elements of the overall audit plan and certain auditprocedures with the entitys audit committee, management and staff to improve theeffectiveness and efficiency of the audit and to coordinate audit procedures with work of the entitys personnel. The overall audit plan and the audit program, however,remain the auditors responsibility. The Overall Audit Plan 8. The auditor should develop and document an overall audit plan describing theexpected scope and conduct of the audit. While the record of the overall audit planwill need to be sufficiently detailed to guide the development of the audit program, itsprecise form and content will vary depending on the size of the entity, the complexityof the audit and the specific methodology and technology used by the auditor.9. Matters to be considered by the auditor in developing the overall audit plan include: Knowledge of the Business General economic factors and industry conditions affecting the entitys business. Important characteristics of the entity, its business, its financial performance and itsreporting requirements including changes since the date of the prior audit.The general level of competence of management.

Understanding the Accounting and Internal Control Systems The accounting policies adopted by the entity and changes in those policies.The effect of new accounting or auditing pronouncements.The auditors cumulative knowledge of the accounting and internal control systemsand the relative emphasis expected to be placed on tests of control and substantiveprocedures. Risk and Materiality The expected assessments of inherent and control risks and the identification of significant audit areas.The setting of materiality levels for audit purposes.The possibility of material misstatement, including the experience of past periods, orfraud.The identification of complex accounting areas including those involving accountingestimates. Nature, Timing and Extent of Procedures Possible change of emphasis on specific audit areas.The effect of information technology on the audit.The work of internal auditing and its expected effect on external audit procedures. Coordination, Direction, Supervision and Review The involvement of other auditors in the audit of components, for example,subsidiaries, branches and divisions.The involvement of experts.The number of locations.Staffing requirements. Other Matters The possibility that the going concern assumption may be subject to question.Conditions requiring special attention, such as the existence of related parties.The terms of the engagement and any statutory responsibilities. The nature and timing of reports or other communication with the entity that areexpected under the engagement. Changes to the Overall Audit Plan and Audit Program 10. The overall audit plan and the audit program should be revised as necessaryduring the course of the audit. Planning is continuous throughout the engagementbecause of changes in conditions or unexpected results of audit procedures. Thereasons for significant changes would be recorded. The Audit Program 11. The auditor should develop and document an audit program setting out thenature, timing and extent of planned audit procedures required to implement theoverall audit plan. The audit program serves as a set of instructions to assistantsinvolved in the audit and as a means to control and record the proper execution of thework. The audit program may also contain the audit objectives for each area and atime budget in which hours are budgeted for the various audit areas or procedures.12. In preparing the audit program, the auditor would consider the specific assessments of inherent and control risks and the required level of assurance to be provided bysubstantive procedures. The auditor would also consider the timing of tests of controlsand substantive procedures, the coordination of any assistance expected from the entity,the availability of assistants and the involvement of other auditors or experts. The othermatters noted in paragraph 9 may also need to be considered in more detail during thedevelopment of the audit program. CSA 320

Introduction 1. The purpose of this Cambodian Standard on Auditing (CSA) is to establish standardsand provide guidance on the concept of materiality and its relationship with audit risk.2. The auditor should consider materiality and its relationship with audit risk whenconducting an audit. 3. 'Materiality' is defined in the following terms:'Information is material if its omission or misstatement could influence the economicdecisions of users taken on the basis of the financial statements. Materiality dependson the size of the item or error judged in the particular circumstances of its omissionor misstatement. Thus, materiality provides a threshold or cut - off point rather thanbeing a primary qualitative characteristic which information must have if it is to beuseful.' Materiality 4. The objective of an audit of financial statements is to enable the auditor toexpress an opinion whether the financial statements are prepared, in all materialrespects, in accordance with Cambodian Accounting Standards. The assessmentof what is material is a matter of professional judgment.5. In designing the audit plan, the auditor establishes an acceptable materiality level so asto detect quantitatively material misstatements. However, both the amount (quantity)and nature (quality) of misstatements need to be considered. Examples of qualitativemisstatements would be the inadequate or improper description of an accountingpolicy when it is likely that a user of the financial statements would be misled by thedescription, and failure to disclose the breach of regulatory requirements when it islikely that the consequent imposition of regulatory restrictions will significantlyimpair operating capability.6. The auditor needs to consider the possibility of misstatements of relatively smallamounts that, cumulatively, could have a material effect on the financial statements.For example, an error in a month end procedure could be an indication of a potentialmaterial misstatement if that error is repeated each month.7. The auditor considers materiality at both the overall financial statement level and inrelation to individual account balances, classes of transactions and disclosures.Materiality may be influenced by considerations such as legal and regulatoryrequirements and considerations relating to individual financial statement accountbalances and relationships. This process may result in different materiality levelsdepending on the aspect of the financial statements being considered.8. Materiality should be considered by the auditor when: res; andplanning the audit, the auditor considers what would make the financialmisstated. The auditors assessment of materiality, related tothe auditor to select audit procedures that, in combination,is an inverse relationship between materiality and the level of audit risk, that is,auditors assessment of materiality and audit risk may be different at the time of aggregate of uncorrected misstatements comprises:specific misstatements identified by the auditor including the net effect of