Professional Documents
Culture Documents
Audit Theory (C1-C6) - CLC
Audit Theory (C1-C6) - CLC
What is management?
What is control
Nature of control
Characteristics of Control
Process of Controlling
Factors that affect control
Historical development of auditing
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What is management?
Management in all business and organizational activities is
the act of getting people together to accomplish desired goals
and objectives using available resources efficiently and
effectively.
Management, in common, is a process of orientation and
organizing to accomplish desired objectives based on
available resources in an efficient and effective manner.
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What is control?
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What is control?
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Nature of control
Controlling is one of the managerial functions like
planning, organizing, staffing and directing.
Controlling is an important function because it helps to
check the errors and to take the corrective action so that
deviation from standards are minimized and stated goals
of the organization are achieved in a desired manner.
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Characteristics of Control
Control is a continuous process
Control is a management process
Control is forward looking
Control is closely linked with planning
Control is a tool for achieving
organizational activities
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Process of Controlling
Setting performance standards.
Measurement of actual performance.
Comparing actual performance with
standards.
Analyzing deviations.
Taking correcting deviations
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Factors that affect control
Type of ownerships
Hierarchies of management
Type of operations
Economic and social conditions
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Historical development of auditing
Prior to 1840
In ancient times:
– The ancient checking activities were found in
Greece around 350 B.C.
– A single public officer was appointed to find
fraudulent actions (embezzlement,
corruption, administrative errors,…).
Examination result was used by court to fine
the person who did fraudulent actions.
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Historical development of auditing
Prior to 1840
In Middle ages:
– In 1494, “double entry book - keeping”
was published by Luca Pacioli
– The merchants of Florence, Genoa, Venice
used auditors to help them verify the
riches brought by captains of sailing ships
and detect of fraud.
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Historical development of auditing
1840s to 1920s
The advent of the industrial revolution in
the UK made vast changes in company’s
scale and nature of operations
The share market during this period was
unregulated and highly speculative
The time was ripe for a profession of
auditing to emerge
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Historical development of auditing
1920s to now
The advancement of the securities market
facilitated the development of auditing
– In 1934, SEC required that all listed
companies have financial statements audited
by an independent auditor
– From 1960s – 1990s, the provision of
advisory services emerged as a secondary
audit function.
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Historical development of auditing - Conclusion
Prior to 1840
The audit objective in the early period was primarily
designed to verify the honesty of persons charges with
fiscal responsibilities
1840s – 1920s
This period prefers to period of “auditing stagnation”
1920s to now
- Audit function focuses on assessing the truth and fairness
of the companies’ financial statements
– Furthermore, auditing provides advisory services to
audit’s client. 16
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Historical development of auditing – in Vietnam
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CHAPTER 2:
NATURE AND FUNCTION OF
AUDITING
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Nature of auditing
What is an audit?
Auditing is the accumulation and
evaluation of evidence about information to
determine and report on the degree of
correspondence between the information and
established criteria.
Auditing is done by a competent,
independent person.
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Nature of auditing
Five components of an audit?
1.Information (related to entity): including
quantifiable and subjective information
2. Criteria: established criteria
3. Evidence gathering and evaluation
4. Competent, independent person
5. Report
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Nature of auditing
Audit of financial statements
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Nature of auditing
Distinction between accounting and auditing
What is accounting?
What is auditing?
Who is responsible for accounting or
auditing?
Can an auditor do both for the same
company?
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Function of auditing
Expression
Verification an opinion
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Verification
Verification is the main function of audit
Verification refers to information audit -
Providing for verification of records in a
sufficiently independent manner from the
institution or subject being audited.
Verification can be detailed by objectives
in conformity with each type of audit.
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Verification – Objectives of an audit
of Financial statements
Existence or occurrence
Completeness
Accuracy
Rights and obligations
Valuation or measurement and allocation
Presentation & disclosure
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Verification – Objectives of an audit
of Financial statements
Occurrence Transactions and events that have been recorded
have occurred and pertain to the Entity;
Assets, liabilities and equity interests exist;
Disclosed events and transactions have occurred
and pertain to the entity.
Completeness All transactions and events that should have been
recorded have been recorded;
All assets, liabilities and equity interests that
should have been recorded have been recorded;
All disclosures that should have been
included in the financial statements have
been included
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Verification – Objectives of an audit
of Financial statements
Accuracy Amounts and other data relating to recorded
transactions and events have been recorded
appropriately;
Transactions and events have been recorded in
the correct accounting period.
Valuation or All assets, liabilities and equity interests are
measurement included in the financial statements at appropriate
and allocation amounts and any resulting
valuation adjustment are recorded appropriately;
Financial and other information are disclosed
appropriately and at the appropriate amounts.
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Verification – Objectives of an audit
of Financial statements
Presentation Transactions and events have been recorded
& disclosure in the proper accounts;
Financial and other information is
appropriately presented and described and
disclosures are clearly expressed.
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The role of auditing
Auditing can reduce information risk, and make
users believe in information audited
Auditing can enhance financial management
Auditing can improve efficiency & effectiveness of
the institution or subject audited
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CHAPTER 3:
CLASSIFICATION OF
AUDITING
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Content
Type of audits
– Financial statements audit
– Compliance audit
– Operational audit (performance audit)
Types of auditors
– Certified public accountant (CPA)
– Government auditor
– Internal auditor
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Financial Statement audit
Definition: Conducted to determine
whether the overall financial statements
are stated in accordance with specified
criteria
Example: Audit of Vinamilk’s financial
statements
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Financial Statement audit
Characteristics of financial statement audit:
– Object of FA is financial statements
– FA can be undertaken by independent auditors,
internal or government auditor
– Established criteria normally are accounting
standards and principles
– Audit results are usually reported to outsiders of
the entity being audited
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Compliance audit
Definition: Compliance audit is to
determine whether the auditee is following
specific procedures or rules set down by a
higher authority
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Compliance audit
Characteristics of compliance audit
– CA evaluates the degree of compliance with
prescribed regulations and rules of auditee
– CA can be carried out by different type of
auditors
– Established criteria are government
legislation, regulations, ordinances, directives,
…
– CA can improve effectiveness in management
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Operational audit
Definition: the audit focuses on the
appraisal of the effectiveness and
efficiency of an activity or an operation of
an organization in order to determine
whether it meets management objectives
and achieves other established criteria
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Operational audit
Purpose of Operational audit
Effectiveness: the degree to which the
organization’s objectives are accomplished
Efficiency: the degree to which costs are
reduced without reducing effectiveness
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Operational audit
Purpose of Operational audit
Effectiveness: the degree to which the
organization’s objectives are accomplished
Efficiency: the degree to which costs are
reduced without reducing effectiveness
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ACTUAL [Efficiency] ACTUAL
INPUTS OUTPUTS
[Economy] [Effectiveness]
PLANNED PLANNED
INPUTS OUTPUTS
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Type of audits
Differences between operational audit and
financial auditing
– Object of the audit
– Purpose of the audit
– Established criteria
– Inclusion of nonfinancial areas
– Distribution of the report
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Types of auditors
Certified public accountant (CPA)
Government auditor
Internal auditor
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Certified public accountant (CPA)
and CPA firms
CPA firms are business entities that provide
auditing services and other services to meet
the need and demand of their client
CPA & CPA firms are usually responsible for
published financial statements of all listed
companies, public companies,…
Auditors who express audit opinion on
financial statements must be licensed as
CPAs
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Certified public accountant (CPA)
Requirements for becoming a CPA in Vietnam
Which organization does have authority to
license CPA in Vietnam?
Which requirements does a person have to
meet to become a CPA in Vietnam?
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Certified public accountant (CPA)
Requirements for becoming a CPA in Vietnam
Educational An undergraduate or graduate degree with a major in
Requirements accounting including a minimum number of accounting
credits
Experience 36 month experience in auditing or
Requirement 4 year experience in accounting
Examination Examination sections are as follow:
Requirement -Advanced Auditing and Attestation
-Advanced Financial accounting and management
accounting
-Advanced Financial reporting
-Advance corporate finance
-Business law
-Taxation
-Language 47
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Positions and duties in an audit firm
Partner (10+ years)
– Top level client relationships
– Review of audit work
– Resolve significant issues arising from the audit
– Signature on audit report
– Attend annual general meeting
– Approval of billings to client
– Ultimate responsibility for everything related to
auditor’s report
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Positions and duties in an audit firm
Manager (5 -10 years)
– Close contact with client
– Direct supervision of audit engagement
– Detailed review of audit work
– Billings to client
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Positions and duties in an audit firm
Supervisor or senior (2 -5 years)
– Direct responsibility for planning and performance
of audit work
– Supervision of assistants and provisions of on the
job training
– Review of assistants’ work
Assistant (0 – 2 years)
– May plan portions of the audit
– Direct responsibility for audit work on assigned
segment of audit 50
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Type of audit firms
International firms: have offices in most
major cities throughout the world and
dominate the practice of public accountancy
National firms: have offices in the major city
in a country and serve mainly medium sized
and small clients
Regional and local firm: serve small
business and individuals in a restricted
geographical area in the city or country
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Government auditor
Government auditor are responsible for
auditing public assets and state budget
Government auditors perform different
type of audits
Organization structure of government audit
varies considerably in many countries in
the world
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Internal auditor
Internal auditing is an independent, objective
assurance and consulting activity designed
to add value and improve an organization’s
operations.
Internal auditors are employed by
organizations to audit for management
Internal auditors’ responsibilities vary
considerably, depending on the employer
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CHAPTER 4:
FUNDAMENTAL CONCEPTS
IN CONDUCTING AN AUDIT
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Learning objectives
4.1. Define fraud and Error
4.2. Distinguish between fraudulent financial reporting
and misappropriation of assets
4.3. Describe the fraud triangle and identify conditions
for fraud
4.4. Define Materiality and Audit risk
4.5. Describe the audit risk model and its components
4.6. Define Management Assertion,
4.7. Specify the characteristics that determine the
persuasiveness of evidence
4.8. Understand the purposes of audit documentation
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Fraud and Error
What is Fraud?
Fraud is an intentional act by one or more
individuals among management, those charged
with governance, employees, or third parties,
involving the use of deception to obtain an
unjust or illegal advantage
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Fraud and Error
Two types (In the context of auditing ):
Fraudulent financial reporting
Misappropriation of assets.
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Fraud and Error
Two types (In the context of auditing ):
Fraudulent Financial Reporting: Fraudulent
financial statements present users with incorrect
financial information that is used for decision
making.
Most cases involve an attempt to overstate
income, but can also understate income.
Earnings management involves fraud to meet
earnings goals.
Income smoothing is a form of earnings
management that shifts income from year to year
to reduce fluctuations. 58
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Fraud and Error
Two types (In the context of auditing ):
Misappropriation of Assets: Fraud that involves
theft of an entity’s assets. Normally perpetrated
by lower level employees, but can involve upper
management.
Misappropriation of Assets is harmful to
creditors, stockholders, and others because the
assets have been taken from their rightful
owners, the company.
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Fraud and Error
The Fraud Triangle: Three condition of Fraud
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Fraud and Error
Three condition of Fraud
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Fraud and Error
What is Error?
Definition: Unintentional mistakes in financial
information
Example:
Errors of commission: mathematical or clerical
mistakes in the recording and accounting data;
Errors of omission: transactions, events is left
out of an accounting statement by mistake.
Errors of principle: misapplication or
misunderstanding of accounting policies
unintentionally. 62
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Fraud and Error
Similarities:
– Results in the misstatement in the financial
statements
– The primary responsibility for the prevention and
detection of fraud and error rests with both those
charged with governance and the management of an
entity.
Differences???:
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Fraud and Error
Management Responsibility
The primary responsibility for the prevention and
detection of fraud and error rests with both those
charged with governance and the management of an
entity. The respective responsibilities may vary from
entity to entity.
The management is responsible for establishing a
control environment and maintain policies and
procedures by implementing and ensuring continued
operation of accounting and internal control systems,
which are designed to prevent fraud and error.
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Fraud and Error
Auditor’s Responsibility
The auditor should consider the risk of material
misstatements in the financial statements resulting
from fraud or error.
An auditor cannot obtain absolute assurance that
material misstatements in the financial statements will
be detected. The auditor is able to obtain reasonable
assurance that material misstatements in the financial
statements will be detected.
The risk of not detecting a material misstatement
resulting from fraud is higher than the risk of not
detecting a material misstatement resulting from error. 65
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Materiality
Materiality is the magnitude of an omission or
misstatement of accounting information that, in
the light of surrounding circumstances, make it
probable that the judgment of reasonable person
relying on the information would have been
changed or influenced by the omission or
misstatement.
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Materiality
Materiality is a relative rather than absolute
concept
Materiality includes both quantitative and
qualitative consideration (size and nature of
the misstatement)
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Evaluating Materiality
Quantitative materiality level
No official guidelines within auditing standards
Bases for evaluating Materiality
– 5-10% of Net Income before Taxes
– ½-1% of Total Assets
– ½-1% of Total Revenue
– 1- 2% of Equity
Auditor add up all individually immaterial
misstatements in order to detect material
misstatement in aggregate. 68
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Evaluating Materiality
Qualitative Considerations
- Amount involve fraud are usually more
important than unintentional errors of equal
dollar amounts => reflect on honest and
reliability of management.
- Misstatements that are otherwise minor may be
material if there are consequences influenced
related significant accounts
- Misstatement s that are otherwise immaterial if
they affect a trend in earning.
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Audit Risk
Audit risk means the risk that the auditor
gives an inappropriate audit opinion when
the financial statements are materially
misstated.
It’s not practical totally eliminate audit risk
=> minimize the risk to extent possible
(accepted audit risk)
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Accepted audit risk
Accepted audit risk is a measure of how
willing the auditor is to accept that the
financial statements may be materially
misstated after the audit is completed and
an inappropriate opinion has been issued.
For many audit firms, accepted audit risk is
5% or lower (1% or ½%,…)
AAR = 5% Same as audit assurance = 95%
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Inherent Risk
Inherent Risk: Risk of a material
misstatement occurring in an assertion
assuming no related internal controls.
Factors that affect inherent risk:
» Nature of the client and its environment
» Nature of the particular financial statement
element
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Inherent Risk
Business characteristics indicative of high
inherent risk:
» Inconsistent profitability of client
» Operating results highly sensitive to economic
factors
» Going concern problems
» Large known and likely misstatements detected in
prior audits
» Substantial turnover, questionable reputation, or
inadequate accounting skills of management
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Control Risk
Control Risk--Risk that a material
misstatement in an assertion will not be
prevented or detected on a timely basis
by the company’s internal control.
Auditors assess CR through evaluating the
effectiveness of internal control system.
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Detection Risk
Detection Risk--Risk that the auditors’
procedures will lead them to conclude
that a material misstatement does not
exist in an assertion when in fact such
misstatement does exist.
Auditors can control DR => have
responsibility to reduce DR by performing
substantive tests
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Audit Risk Model
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Management assertion
Management assertion are implied and
expressed representations by management
about classes of transaction and related
accounts in the financial statements.
These assertions are part of the criteria that
management uses to record and disclose
accounting information in financial
statements
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Management Assertions Embodied
in the Financial Statements
Existence or Occurrence: Assets, liabilities, and
owners’ equity accounts reflected in the financial
statements exist; the recorded transactions have
occurred.
Completeness: All transactions, assets, liabilities, and
elements of owners’ equity that should be presented
in the financial statements are included.
Rights and Obligations: The client has rights to
assets and obligations to pay liabilities that are
included in the financial statements.
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Management Assertions Embodied
in the Financial Statements
Valuation or Allocation: Assets, liabilities, owners’
equity, revenues, and expenses are presented at
amounts that are determined in accordance with
generally accepted accounting principles.
Presentation and Disclosure: Accounts are described
and classified in the financial statements in
accordance with generally accepted accounting
principles, and all material disclosures are provided.
Accuracy: Amounts and other data relating to
recorded transactions have been recorded properly.
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Relationship of Financial Statement
Assertions and the Audit
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Audit evidence (AE)
What is the audit evidence?
– AE is the information obtained by the auditor in
arriving at the conclusions on which the audit
opinion is based.
– AE includes source documents and accounting
records underlying the financial report and
corroborating information from other sources.
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Audit evidence
The auditor should obtain sufficient
appropriate audit evidence to be able to
draw reasonable conclusions on which to
base the audit opinion
– Sufficient audit evidence
– Appropriate audit evidence
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Sufficiency
Sufficiency is the measure of the quantity
of audit evidence
Affecting to sufficiency of audit evidence
– Audit evidence’s quality: the higher
quality…., the less…
– Materiality: the more… the more…
– Risk of material misstatement: the greater…
the more…
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Appropriateness
Appropriateness relates to the relevance
and reliability of audit evidence
Or appropriateness is the measure of
quality of audit evidence relevance to a
particular assertion and its reliability
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Affecting to appropriateness
of audit evidence
Types of evidence
Source of evidence (independence of
provider)
Internal control system’s effectiveness
Audit direct knowledge
Qualification of individual
Interrelation of evidence
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Appropriateness of Audit Evidence
Principles—Audit evidence is ordinarily more
reliable when it is
– Obtained from knowledgeable independent sources
outside the company rather than nonindependent
sources.
– Generated internally through a system of effective
controls rather than ineffective controls.
– Obtained directly by the auditor rather than
indirectly or by inference
– Documentary in form rather than oral
– Provided by original documents rather than copies
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Short Exercise
The following are examples of documentation
obtained by the auditors:
1. Duplicate copies of sales invoices
2. Purchase orders
3. Bank confirmation
4. Vendors’ invoices
5. Shipping document
6. Long – term debt agreements
Classify each document as internal evidence or
external evidence, as to its reliability (high, moderate or
low). 87
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Working Papers
Functions of Working Papers:
– Provide support for the auditors 'opinion
– Document the auditors’ compliance with
generally accepted auditing standards,
especially the standards of field work
– Provide a means of assigning and coordinating
audit work
– Aid in supervising and reviewing the audit work
– Aid in planning and conducting future audits
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Working Papers
Types of Working Papers:
– Audit Administrative Working Papers
– Working Trial Balance
– Lead Schedules (Grouping Sheets)
– Adjusting and Reclassification Journal Entries
– Supporting Schedules
– Account Analysis
– Reconciliations
– Computational Working Papers
– Corroborating Documents 89
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Types of Audit Files
Current files
» Typically arranged and indexed around
accounts in clients’ financial statement
» Support current year’s audit report
Permanent files
» Document items of concern over multiple
years
» Provide summary of policies and organization
of client
» To preserve working papers that have little
change over time.
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CHAPTER 5
AUDITING STANDARDS
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Learning Objectives
Overview of auditing standards
Generally accepted auditing standards
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What are auditing standards?
Standards on Auditing are professional rules that
deal with auditor's responsibilities when
conducting an audit.
Auditing standards contain objectives and
requirements together with application and other
explanatory material.
The auditor is required to have an understanding of
the entire text of an auditing standard, including its
application and other explanatory material, to
understand its objectives and to apply its
requirements properly.
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The role of auditing standards
Governing the way in which an audit should
be performed and outlining requirement that
an auditor should meet
Protecting auditors from the matter of legal
liability
Assessing and reviewing audit quality
Providing the courts with an authoritative
benchmark against which to measure an
auditor’s performance in the event of an
auditor’s work being subject to litigation
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Structure of auditing standards
Introduction: the scope and purposes of the standard
Objective: the objective to be achieved by the auditor
Definitions: the terms that need to be defined within
the standard
Requirements: the requirements to be complied with,
together with explanatory material necessary to make
the section understandable by an experienced auditor
Application and other explanatory material: material,
supplemented in some cases by appendices, that
provides further explanation and guidance supporting
proper application of the auditing standard
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Structure of auditing standards
ISA example
Introduction. Introductory material may include the purpose,
scope, and subject matter of the ISA, in addition to the
responsibilities of the auditor and others in the context in which
the ISA is set.
Objective. Each ISA contains a clear statement of the objective of
the auditor in the audit area addressed by that ISA.
Definitions. For greater understanding of the ISAs, applicable
terms are defined in each ISA.
Requirements. Each objective is supported by clearly stated
requirements. Requirements are always expressed by the phrase
"the auditor shall."
Application and other explanatory material. The application and
other explanatory material explains more precisely what a
requirement means or is intended to cover, or includes examples
of procedures that may be appropriate under given circumstances.
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Issuing bodies of auditing
standards
Based on the scope of issuing bodies:
– National issuing bodies
– International issuing bodies
Based on the type of auditor
– Government audit
– Independent audit
– Internal audit
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Issuing bodies of auditing
standards in the United States
Independent audit
+ AICPA – American Institute of Certified Public
Accountants
+ PCAOB – The Public Company Accounting Oversight
Board
Government audit
+ GAO – Government Accountability Office (General
Accounting Office)
Internal audit
+ IIA – Institute of Internal Auditors
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Issuing bodies of auditing
standards in the United States
The AICPA sets standards and rules that all members and
other practicing CPAs must follow. This authority extends
to the following areas:
1. Auditing Standards
2. Compilation and Review Standards
3. Other Attestation Standards
4. Consulting Standards
5. Code of Professional Conduct
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Issuing bodies of auditing
standards in the United States
Auditing Standards:
The Auditing Standards Board (ASB) is responsible for
issuing pronouncements on auditing matters
100
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Issuing bodies of auditing
standards in the United States
Compilation and Review Standards:
The Accounting and Review Services Committee is responsible
for issuing pronouncements of the CPAs responsibilities when
the CPA is associated with financial statements of non-public
companies that are not audited.
The Statements on Standards for Accounting and Review
Services (SSARS), provide guidance for providing compilation
(no assurance on financials) and review services (limited
assurance on financials
101
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Issuing bodies of auditing
standards in the United States
Other Attestation Services :
Forms of attestation are often performed for other than
historical financial statements.
Examples of other attestation services involve prospective
financial information in forecasts and projections.
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Issuing bodies of auditing
standards in the United States
Consulting Standards :
The Management Consulting Services Executive Committee is
responsible for issuing pronouncements on consulting services.
Consulting differs from attestation in that the CPA does not
report on another party’s assertion. Rather, the CPA develops
findings, conclusions, and recommendations.
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Issuing bodies of auditing
standards in the United States
Code of Professional Conduct :
The AICPA Committee on Professional Ethics sets rules of
conduct that CPAs are required to meet.
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The Public Company Accounting
Oversight Board (PCAOB)
A Primary Responsibility of the PCAOB:
Establishment of standards for auditing,
quality control, ethics, and independence,
as well as attestation, for registered
accounting firms
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SEC Oversight Over PCAOB
In addition to appointing or removing
members, the SEC, among other things,
must approve the Board’s budget and
rules, including auditing standards, and
may review appeals of adverse Board
inspection reports and disciplinary actions
against registered accounting firms.
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General Accountability Office
The GAO was established as the General
Accounting Office by the Budget and
Accounting Act of 1921
The Government Accountability Office also
establishes standards for audits.
These standards, often referred to as
Generally Accepted Government Auditing
Standards (GAGAS), are to be followed by
auditors and audit organizations when
required by law, regulation, agreement,
contract, or policy. 107
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The Institute of Internal
Auditors (IIA)
Established in 1941, The IIA is a guidance-setting
body of internal auditing
The IIA has two levels of professional guidances:
(1) Mandatory Guidance and (2) Strongly
Recommended Guidance. The two levels of
guidance constitute the IIA's International
Professional Practices Framework (IPPF).
Mandatory Guidance: the Definition of Internal
Auditing, the Code of ethics and The International
Standards for the Professional Practice of Internal
Auditing Standards
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Generally Accepted Auditing Standards
Generally Accepted Auditing Standards (GAAS):
A Measure of the Quality of Audit Work
A. 3 General Standards
B. 3 Standards Of Field Work
C. 4 Standards Of Reporting
Note: Although the term generally accepted
auditing standards continues to be used for audits
of private companies, public company audits
should refer to PCAOB auditing Standards.
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General Standard No. 1
The audit is to be performed by a person or
persons having adequate technical training
and proficiency as an auditor
What does auditor training and proficiency
involve?
a. Specific education in auditing
b. Professional experience
c. Continuing education
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General Standard No. 2
In all matters relating to the assignment, an
independence in mental attitude is to be
maintained by the auditor or auditors.
– Independence in mind
– An auditor must also be independent in
appearance
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General Standard No. 3
Due professional care is to be exercised in
the performance of the audit and the
preparation of the report.
The Standard of the Prudent Practitioner
– An auditor must exercise both : Professional
Judgment and Professional Skepticism
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Standard of Fieldwork No. 1
The work is to be adequately planned and
assistants, if any, are to be properly
supervised.
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Standard of Fieldwork No. 2
A sufficient understanding of internal
control is to be obtained to plan the audit
and to determine the nature, timing, and
extent of tests to be performed.
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Standard of Fieldwork No. 3
Sufficient competent evidential matter is to
be obtained through inspection,
observation, inquiries, and confirmations
to afford a reasonable basis for an opinion
regarding the financial statements under
audit.
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Standard of Reporting No. 1
The report shall state whether the financial
statements are presented in accordance
with generally accepted accounting
principles
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Standard of Reporting No. 2
The report shall identify those
circumstances in which such principles
have not been consistently observed in the
current period in relation to the preceding
period.
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Standard of Reporting No. 3
Informative disclosures in the financial
statements are to be regarded as
reasonably adequate unless otherwise
stated in the report.
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Standard of Reporting No. 4
The report shall contain either an
xpression of opinion regarding the
financial statements, taken as a whole, or
an assertion to the effect that an opinion
cannot be expressed.
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