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International Auditing Overview: Principles of Auditing: An Introduction To International Standards On Auditing - Ch. 1
International Auditing Overview: Principles of Auditing: An Introduction To International Standards On Auditing - Ch. 1
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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Historical background
Records of auditing activity in early Babylonian
times (around 3,000 BC).
Ancient China, Greece and Rome.
The Latin meaning of the word 'auditor' was a
'hearer or listener' because in Rome auditors
heard taxpayers.
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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consistent
international investors comprehend financial
statements from different countries
high quality
Non-national standards encourage better
quality, less political influence
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 1.9
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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ISAs
100-999 International Standards on Auditing
(ISAs)
100-199 Introductory Matters
120 Framework of International Standards on
Auditing
200-299 General Principles And Responsibilities
200 Objective and General Principles Governing an
Audit of Financial Statements
210 Terms of Audit Engagements
220 Quality Control for Audit Work
230 Documentation (ED)
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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ISAs
240 The Auditors Responsibility to Consider Fraud and Error in
an Audit of Financial Statements (ED)
250 Consideration of Laws and Regulations in an Audit of
Financial Statements
260 The Auditors Communication with Those Charged with
Governance (ED - Final)
300-499 Risk Assessment And Response To Assessed
Risks
300 Planning (ED)
310 Knowledge of the Business
315 Understanding the Entity and Its Environment and
Assessing the Risks of Material Misstatement (ED)
320 Materiality in the Identification and Evaluation of
Misstatements (ED final)
330 The Auditors Procedures in Response to Assessed Risks
(ED)
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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ISAs
400 Risk Assessments and Internal Control
401 Auditing in a Computer Information Systems
Environment
402 Audit Considerations Relating to Entities Using
Service Organizations
500-599 Audit Evidence
500 Audit Evidence
500R Audit Evidence
501 Audit EvidenceAdditional Considerations for
Specific Items
505 External Confirmations
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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ISAs
510 Initial EngagementsOpening Balances
520 Analytical Procedures
530 Audit Sampling and Other Selective Testing Procedures
540 Auditing Accounting Estimates and Related Disclosures
(Other than Those Involving Fair Value Measurements and
Disclosures) (ED- final)
545 Auditing Fair Value Measurements and Disclosures
550 Related Parties (ED)
560 Subsequent Events
570 Going Concern
580 Management Representations
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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ISAs
600-699 Using Work Of Others
600 The Audit of Group Financial Statements (ED final)
610 Considering the Work of Internal Auditing
620 Using the Work of an Expert
700-799 Audit Conclusions And Reporting
700 The Auditors Report on Financial Statements
701 The Independent Auditors Report on Other Historical Financial
Information (ED final - new)
705 Modifications to the Opinion in the Independent Auditors
Report (ED final - new)
706 Emphasis of Matter Paragraphs and Other Matters Paragraphs
in the Independent Auditors Report (ED final - new)
710 Comparatives
720 Other Information in Documents Containing Audited Financial
Statements
800-899 Specialized Areas
800 The Independent Auditors Report on Summary Audited
Financial Statements (ED final)
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 1.15
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 1.16
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 1.17
Audit Definition
An audit is a systematic process of
objectively obtaining and evaluating
evidence regarding assertions about
economic actions and events to ascertain
the degree of correspondence between
these assertions and established criteria
and communicating the results to
interested users.
American Accounting Association
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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TYPES OF AUDIT
Audit of financial statements
Examine financial statements, determine if they give
a true and fair view or fairly present the financial
statements.
Operational Audit
A study of a specific unit of an organization for the
purpose of measuring its performance.
Compliance Audit
A review of an organizations procedures and
financial records performed to determine whether
the organization is following specific procedures,
rules, or regulations set out by some higher
authority.
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 1.22
Types of Auditors
Internal auditors are employed by individual
companies to investigate and appraise the
effectiveness of company operations for
management.
Independent auditors are typically certified
either by a professional organization or
government agency.
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 1.23
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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Management
assertions
Management assertions
are implied or expressed
representations by
management about
classes of transactions
and related accounts in
the financial statements.
An example of a
management assertion is
that the companys
financial statements are
prepared based on
international financial
reporting standards.
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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Audit Staff
Staff Accountants (or Junior Assistants then Senior)
Senior Accountants (or Supervisor)
Managers
Partners/Directors
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
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[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007