International Auditing Overview: Principles of Auditing: An Introduction To International Standards On Auditing - Ch. 1

Slide 1.
International Auditing Overview

Principles of Auditing: An Introduction to
International Standards on Auditing - Ch. 1
Rick Stephan Hayes,

Philip Wallage, Hans
Görtemaker
[Hayes, Wallage and Görtemaker Principles of Auditing An Introduction to ISAs, edition 3] © Pearson Education Limited 2014
Slide 1.2
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.
Modern auditing dates
to beginning of the
modern corporation
Slide 1.3
Brief history of auditing
• The attitude of profit maximization from

end middle ages - merchant houses in
Italy.
• Double-entry bookkeeping was first
described in Italy (Pacioli 1494).
• Industrial Revolution Great-Britain
1780 lead to the emergence of large
industrial companies.
• 1853 the Society of Accountants in
Edinburgh was founded.
Slide 1.4
Auditing Standards and Regulation are Rapidly Changing
Slide 1.5
The auditor, corporations and Financial

Information
• Investor dan kreditor bisa memiliki tujuan yang
berbeda dengan manejemn (manajemen lebih
tertarik pada gaji dan tunjangan yang tinggi
sebagai beban), sedangkan investor lebih
menyukai laba dan dividen yang tinggi. Investor
dan kreditor sangat menggantungkan pada
laporan keuangan yang wajar. Untuk
memberikan keyakinan kepada mereka, auditor
menyediakan opini ekspert dan independensi
mengenai kewajaran laporan tersebut; hal ini
disebut opini audit;
Slide 1.6
By the audit process, the auditor enhances the

usefulness and value of the financial
statements, and also increases the credibility
of other non-audited information released by
management.
Slide 1.7
The function of auditing is to lend credibility to the financial

statements
 Is the company a going concern?

 Is it free of fraud?
 Is it managed properly?
 Is there integrity in its database?
 Do directors have proper and adequate
information to make decisions?
 Are there adequate controls?
 What effect do the company's products and by-
products have on the environment?
 Can an ‘unfortunate mistake’ bring this company
to its knees?
Slide 1.8
International Financial Reporting Standards
• International Financial Reporting Standards (IFRS)

are the standards that are applied for financial
accounting.
• IFRS were formerly called International Accounting
Standards (IAS)
• The International Accounting Standards Board
(IASB) has accounting standard setting
responsibilities for IFRS.
• The EU has agreed to apply most of the IFRS from
2005 onwards.
Slide 1.9
Advantages of International Auditing

Standards
• worldwide
– increases confidence in non-domestic
investment
• consistent
– international investors comprehend financial
statements from different countries
• high quality
– Non-national standards encourage better
quality, less political influence
Slide 1.10
International Auditing and Assurance Standards Board (IAASB)

Issues:
• International Standards on Auditing (ISAs) as the standards

to be applied by auditors in reporting on historical financial
information.
• International Standards on Assurance Engagements (ISAEs)
as the standards to be applied by practitioners in assurance
engagements dealing with information other than historical
financial information
• International Standards on Quality Control (ISQCs) as the
standards to be applied for all services falling under the
Standards of the IAASB, and
• International Standards on Related Services (ISRSs) as the
standards to be applied on related services, as it considers
appropriate
• International Standards on Review Engagements (ISREs) as
the standards to be applied to the review of historical
financial information.
Slide 1.11
Slide 1.12
Daftar ISAs 2013

ISQC1
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 Overall Objective of Independent Auditor and the
Conduct of an Audit in Accordance with ISA
210 Agreeing of the Terms of Audit Engagements
220 Quality Control for an Audit of FS
230 Audit Documentation
Slide 1.13
ISAs
240 The Auditor’s Responsibility Relating to Fraud in an Audit of
FS
250 Consideration of Laws and Regulations in an Audit of FS
260 Communication with Those Charged with Governance
265 Communicating deficiencies in Internal Control to TCWG
and Management
300-499 Risk Assessment And Response To Assessed
Risks
300 Planning an Audit of FS
315 Identifying and Assessing the Risks of Material
Misstatement through Understanding the Entity and its
Environment
320 Materiality in Planning and Performing an Audit
330 The Auditor’s Responses to Assessed Risks
Slide 1.14
ISAs
402 Audit Considerations Relating to Entities Using

a Service Organizations
450 Evaluation of Misstatements Identified during
the Audit
500-599 Audit Evidence
500 Audit Evidence
501 Audit Evidence—Specific Considerations for
Selected Items
505 External Confirmations
Slide 1.15
ISAs
510 Initial Audit Engagements—Opening Balances
520 Analytical Procedures
530 Audit Sampling
540 Auditing Accounting Estimates, Including Fair Value
Accounting Estimates, and Related Disclosures
545 Auditing Fair Value Measurements and Disclosures
550 Related Parties
560 Subsequent Events
570 Going Concern
580 Management Representations
Slide 1.16
600-699 Using Work Of Others ISAs

600 Special Considerations - Audits of Group Financial Statements
(Including the Work of Component Auditors)
610 Using the Work of Internal Auditors
620 Using the Work of an Auditor’s Expert
700-799 Audit Conclusions And Reporting
700 Forming an Opinion and Reporting of FS
705 Modifications to the Opinion in the Independent Auditor’s Report
706 Emphasis of Matter Paragraphs and Other Matters Paragraphs in the
Independent Auditor’s Report
710 Comparatives Information – Corresponding Figures and Comparative
FS
720 The Auditor’s Responsibilities Relating to Other Information in
Documents Containing Audited FS
800-899 Specialized Areas
800 Special Considerations – Audit of FS Prepared in Accordance with
Special Purpose Frameworks.
805 Special Considerations – Audit of Single FS and Specific Elements
Accounts or Items of a FS
810 Engagements to Report on Summary FS
International Auditing Practice Notes
IAPN 1000 Special Considerations in Auditing Financial Instruments
Slide 1.17
• 2000-2699 International Standards on Review Engagements

(ISREs)
•
ISRE
2400 Engagements to Review Financial Statements (Previously ISA
910)
• 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity (ED - new)
• 3000-3699 International Standards on Assurance Engagements
(ISAEs) ISAE
• 3000 Assurance Engagements (Previously ISAE 100)
• 3000R Assurance Engagements Other Than Audits or Reviews of
Historical Financial Information
• 3400 The Examination of Prospective Financial Information
(Previously ISA 810)
• 4000-4699 International Standards on Related Services (ISRSs)
• 4400 Engagements to Perform Agreed-upon Procedures Regarding
Financial Information (Previously ISA 920) ISRS
• 4410 Engagements to Compile Financial
• Information (Previously ISA 930)
Slide 1.18
ISA 200 states the objective of an audit of

financial statements is to enable the auditor
to express an opinion whether the financial
statements are prepared, in all material
respects, in accordance with an identified
financial reporting framework.
Terms used 'give a true and fair view' or
‘present fairly, in all material respects’
equivalent terms?
Slide 1.19
• Public Interest Oversight

• Public Interest oversight board (PIOB)
mengawasi aktivitas IFAC yang memiliki
kepentingan publik. Tujuan PIOB adala untuk
meningkatkan kepercayaan investor dan pihak
lain terhadap aktivitas – aktivitas seperti
penyusunan standar oleh IAASB telah
direspon dengan tepat untuk kepentingan
public. Anggota PIOB diusulkan oleh
International Institutions and Regulatory
Bodies
Slide 1.20
• Role of the IAASB CAG

• IAASB Consultative Advisory Group berisi
perwakilan dari regulator, organisasi bisnis
dan internasional dan pengguna serta
penyusun laporan keuangan yang
berkepentingan terhadap perkembanan dan
pemeliharaan ISA, pengendalian mutu, asuran
lain, dan jasa tekait yang berkualitas tinggi.
Melalui konsultasi aktif IAASB menerima
masukan public dari CAG mengenai agenda –
agendanya, jadwal proyek, dan masalah
tehnis.
Slide 1.21
• Tujuan IAASB secara suka rela mendapat pengakuan dan

penerimaan pedoman audit secara internasional. ISA
tidak dimaksudkan untuk menggantikan regulasi nasional
terkait audit atas informasi keuangan. ISA bukan
keharusan untuk dipaksakan seperti GAAS di US. ISA
wajib diterapkan di Eropa tahun 2005 dan daerah lain
kemudian juga mengikutinya.
• Pada bulan April 2013, Negara – Negara berikut telah
menerapkan ISA
• Eropa (33)
• Amerika (17)
• Asia Pasifik (18)
• Afrika/ Timur Tengah (18)
Slide 1.22
ISA
• ISA dikembangkan oleh IFAC melalui IAASB. IFAC
didirikan tahun 1977 yang salah satu usahanya
diarahkan untuk mengembangkan pedoman tehnis,
etik dan pendidikan bagi auditor secara internasional
serta melakukan usaha saling mengakui kualifikasi
praktisi.
• IFAC beranggotakan berjuta – juta orang pada
praktik publik dan swasta, akademisi pendidikan dan
jasa pemerintah;
• Terdapat beberapa kelompok di dalam IFAC, yaitu
dewan IFAC yang bertanggungjawab terhadap
pengendalian terhadap IFAC;
Slide 1.23
• Dewan IFAC mengawasi manajemen

organisasi, melakukan tindakan untuk
meningkatkan transparansi aktivitas IFAC
tertentu, dan mengawasi perluasan size IFAC
termasuk badan – badan yang memiliki
keanggotaan. Aktivitas penyusunan standar
oleh IFAC secara khusus dilakukan oleh
IAASB, Komite Etik, Komite Pendidikan dan
Komite Seksi Publik dengan kepentingan
terhadap pelaporan keuangan Pemerintah;
Slide 1.24
ISA Sebagai Harmonisasi Standar

•ISA merupakan standar sangat menarik bagi auditor
karena ISA tersebut merupakan standar untuk
sebagaian besar pekerjaan auditor, yaitu pekerjaan
audit atas laporan keuangan dan perikatan bertujuan
khusus. Walaupun tidak semua negara mensyaratkan
ISA tetapi ISA tersebut akan digunakan sebagai
standar dasar , karena standar tersebut mencerminkan
representasi GAAS internasional yang terbaik;
•ISA merupakan harmonisasi standar, aplikasi yang
mempromosikan audit secara internasional yang
konsisten secara global
Slide 1.25
• Praktik dan teori audit internasional mencakup

pengetahuan tambahan mengenai ISA,
pertimbangan standar pengendalian mutu,
alokasi materialitas, pelaksanaan audit,
koordinasi pelaporan internasional dan
personalia
Slide 1.26
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
Slide 1.27
Components of the Audit Definition
• An audit is a Systematic approach. The audit

follows a structured, documented plan (audit
plan). In the process of the audit, accounting
records are analysed by auditors using a
variety of generally accepted techniques. The
audit must be planned and structured in such
a way that those carrying out the audit can
fully examine and analyse all – important
evidence
Slide 1.28
• An audit is conducted objectively. And audit is an

independent, objective and expert examination and
evaluation of evidence. They maintain an impartial
attitude.
• The Auditor obtains and evaluates evidence. The auditor
assesses the reliability and sufficiency of information
contained in the underlying accounting records and other
source data by:
- Studying and evaluating accounting systems and intern
control on which he wishes to rely and testing those
internal control to determine the nature, extent and timing
of other auditing procedures; and
- Carrying out such other tests, inquires and other
verification procedures of accounting transaction and
account balances, as he considers appropriate in the
particular circumstances
Slide 1.29
• The evidence obtained and evaluated by the auditor

concerns assertions about economic actions and events.
The basis of evidence gathering objectives, what evidence
must prove, are the assertions of management. Assertions
are representations by management, explicit or otherwise,
that are embodied in FS. One assertion of mgt about
economic actions is that all the assets reported on the
balance sheet actually exist at balance sheet date. The
asset are real, not fictitious. This is the existence assertion.
Furthermore, mgt asserts that the company owns all the
assets. They do not belong to anyone else. This is the right
and obligations assertions;
• The auditor ascertain the degree of correspondence
between assertion and established criteria. The audit
programme tests most assertions by examining the physical
evidence of documents, confirmation, inquiry, and
observation.
Slide 1.30
• The auditor examines the evidence for the assertion

presentation and disclosure to determine if the accounts
are described in accordance with the applicable financial
reporting framework, such as IFRS, local standards or
regulations and laws.
• Goal or objective, of the audit is communicating the
results to interested users. The audit is conducted with
the aim of expressing an informed and credible opinion in
a written report. If the item audited is the FS, the auditor
must state that in their opinion the statement’s “give a true
and fair view” or “present fairly, in all material respects”
the financial position of the company. The purpose of the
independent expert opinion is to lend credibility to the FS.
The communication of the auditor’s opinion is called
attestation, or the attest function. In an audit this
attestation is called the audit report.
Slide 1.31
General Principles Governing an Audit of FS
• Although a public auditor can also examine

non-financial information, such as compliance
with company policies or environmental
regulations, the majority of audit work is
concerned with the FS. The FS audited under
international standards are the balance
sheets, income statements and cash flow
statements and the notes thereto.
Slide 1.32
• Requirement of a FS Audit
- ISA 200 sets out several requirements relating to an audit
of financial statements. The auditor is required to comply
with relevant ethical requirement, including those
pertaining to independence, relating to FS audit
engagements, the auditor shall plan and perform an audit
with professional scepticism recognizing that
circumstances may exist that cause the FS to be
materially misstated. The auditor shall exercise
professional judgment in planning and performing an audit
of FS. To obtain reasonable assurence, the auditor must
obtain sufficient appropriate audit evidence to reduce
audit risk to an acceptably low level and thereby enable
the auditor to draw reasonable conclusions on which to
base the auditor’s opinion
Slide 1.33
• Objective, Purpose and Characteristics of a FS Audit

In conducting an audit of FS, the overall objectives of the
auditor are
- To obtain reasonable assurance about whether the FS as
a whole are free from material misstatement, whether due
to fraud or error, thereby enabling the auditor to express
an opinion on whether the FS are prepared, in all material
respects, in accordance with an applicable Financial
Reporting Frameworks; and
- To report on the FS, and communicate as required by the
ISAs, in accordance with the auditor’s findings.
The purpose of an audit is to enhance the degree of
confidence of intended users in the FS. This is achieved
by the expression of an opinion by the auditor on whether
the FS are presented fairly, in all material respects, in
accordance with specific framework
Slide 1.34
An audit conducted in accordance with ISAs and relevant

ethical requirements enables the auditor to form that opinion
•The FS subject to audit are prepared by management to the
entity with oversight from TCWG. ISAs do not impose
responsibilities on mgt or TCWG and do not override laws and
regulations that govern their responsibilities. However, an audit
in accordance with ISA is conducted on the premise that mgt
dan TCWG have acknowledged certain responsibilities that
fundamental to the conduct of the audit. The audit of FS does
not relieve management or TCWG of their responsibilities.
•The Concept of materiality is applied by the auditor both in
planning and performing the audit, and in evaluating the effect
of identified misstatements on the audit and the FS.
Misstatements, including omissions, are considered to be
material if, individually or in the aggregate, the could
reasonably be expected to influence the economic decision.
Slide 1.35
• Judgment about materiality are made in the light of

surrounding circumstances, and are affected by the
auditor’s perception of the financial information needs of
users of the FS, and by the size or nature of a
misstatement, or a combination of both. The auditor’s
opinion deals with the FS as a whole and therefore the
auditor is not responsible for the detection of
misstatements that are not material to the FS as a whole.
• The ISAs require that the auditor exercise professional
judgment and maintain professional scepticism
throughout the planning and performance of the audit
and, among other things:
- Identify and assess risks of material misstatement,
whether due to fraud or error, based on an understanding
of the entity and its environment, including the entity’s
internal control;
Slide 1.36
- Obtain sufficient appropriate audit evidence about

whether material misstatement exist, through designing
and implementing appropriate responses to the assessed
risk;
- Form an opinion on the FS based on conclusion drawn
from the audit evidence obtained
The form of opinion expressed by the auditor will depend
upon the applicable financial reporting framework and any
applicable law or regulation. The auditor may also have
certain other communication and reporting responsibilities
to user, management, TCWG, or parties outside the
entity.
Slide 1.37
Limitation of the Audit
• There are certain inherent limitation in an audit that effect

the auditor’s ability to detect material misstatement. The
limitations result from such factors as the use of testing,
the inherent limitation of any accounting and internal
control system and the fact that most audit evidence is
persuasive rather than conclusive. Furthermore, the work
performed by an auditor to form an opinion is permeated
by judgment. Judgment is required to determine the
nature and extent of audit evidence and the drawing of
conclusions based on the audit evidence gathered.
Because of these factors, and audit is no guarantee that
the financial statements are free of material misstatement;
Slide 1.38
Risk in FS, Transactions, Account Balances

and Disclosures
• In order to design audit procedures to determine whether FS
are materially misstated, the auditor consider the risk at two
level. One, level of risk is that the overall financial statement
may be misstated. The second risk is misstatement in
relation to class of transaction, account balance and
disclosures.
• The risk of material misstatement at the overall FS level
often relate to the entity’s control environment (although
these risk may also relate to other factors, such as declining
economic conditions). This overall risk may be especially
relevant to the auditor’s consideration of fraud. The auditor
also considers the risk of material misstatement at the class
of transactions, account balance and disclosure level.
Slide 1.39
These consideration directly assist in determining the nature,

timing, and extent of further audit procedures;
While the auditor is responsible for forming and expressing
an opinion on the FS, the responsibility for preparing and
presenting the FS is that of management of the entity.
However, the audit of the FS does not relieve management
of its responsibility
Slide 1.40
General Principles Governing an Audit of

Financial Statements
 An auditor should comply with the Code of

Ethics for Professional Accountants issued by
IFAC.
 An auditor should conduct an audit in
accordance with International Standards on
Auditing.
Slide 1.41
General Principles Governing an Audit of Financial

Statements
 Scope of an audit - the audit procedures deemed

necessary to achieve the objective of the audit.
 Certain inherent limitations in an audit affect the
auditor’s ability to detect material misstatements.
 Test and sampling
 Internal control
 Audit evidence
 Audit process permeated by judgment
 Management is responsible for the financial
statements, accounting, and internal control.
Slide 1.42
Business Risk and Audit Risk

• Companies, depending on the nature
of their operations and industry, the
regulatory environment in which they
operate, and their size and complexity,
they face a variety of business risks.
• The risk that causes the greatest
concern by the auditor is the risk that
the auditor expresses an inappropriate
audit opinion when the financial
statements are materially misstated
(known as audit risk). “The auditor
should plan and perform the audit to
reduce audit risk to an acceptably low
level that is consistent with the
objective of an audit.” (ISA 200)
Slide 1.43
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 organization’s procedures and
financial records performed to determine whether
the organization is following specific procedures,
rules, or regulations set out by some higher
authority.
Slide 1.44
Audit of Financial Statements

• Audit atas LK menguji LK untuk menentukan
apakah LK disajikan secara wajar sesuai
dengan kriteria yang telah ditetapkan. Kriteria
tersebut adalah IFRS – GAAP (US);
Slide 1.45
Audit Operasional
• Merupakan studi unit organisasi tertentu dengan tujuan
mengukur kinerja;
• Audit operasional menelaah semua atau sebagian
prosedur operasi organisasi untuk mengevaluasi
efektivitas dan efisiensi operasi;
• Efektivitas merupakan ukuran apakah organisasi telah
mencapai tujuan umum dan khusus organisasi. Efisiensi
menunjukkan seberapa baik organisasi menggunakan
resources untuk mencapai tujuan tersebut. Review
operasional tidak dibatasi pada akuntansi tetapi juga bisa
mencakup evaluasi struktur organisasi, pemasaran,
metoda produksi, operasi komputer atau area mana yang
memerlukan evaluasi.
Slide 1.46
• Rekomendasi umumnya ditujukan kepada

manajemen untuk memperbaiki operasi;
• Operasi bagian penerimaan barang
perusahaan manufakturing, dievaluasi terkait
efektivitas dan efisiensi. Namun dalam operasi
manajemen kriteria efektivitas dan efisiensi
tidak begitu jelas sehingga sering
pengukurannya relatif subyektif dibandingkan
dengan audit atas laporan keuangan dan audit
ketaatan;
Slide 1.47
Audit Ketaatan
• Audit ketaatan merupakan telaah atas prosedur
organisasi untuk menentukan apakah organisasi
telah mengikuti prosedur, aturan atau regulasi yang
telah ditetapkan oleh otoritas yang lebih tinggi;
• Audit ketaatan mengukur ketaatan entitas terhadap
kriteria yang telah ditetapkan.
• Pelaksanaan audit ketaatan tergantung pada
keberadaan data yang bisa diverifikasi dan kriteria
atau standar yang telah ditetapkan, seperti hukum
dan peraturan perundangan atau prosedur dan
kebijakan organisasi.
Slide 1.48
• Personalia akuntansi, sebagai contoh, dievaluasi

untuk menentukan apakah dia mengikuti prosedur
yang telah ditetapkan oleh Controller perusahaan.
Personalia lain bisa dievaluasi untuk menentukan
apakah mereka mengikuti kebijakan dan prosedur
yang telah ditetapkan oleh manajemen.
• Hasil audit ketaatan umumnya dilaporkan kepada
manajemen pada unit organisasi yang diaudit;
• Audit ketaatan umumnya diasosiasikan dengan
auditor pemerintah, otoritas pajak, auditor internal
pemerintah, atau audit kepada bank untuk
menentukan ketaatan terhadap regulasi bank sentral;
juga untuk menentukan ketaatan wajib pajak terhadap
ketentuan perpajakan
Slide 1.49
• Audit ketaatan juga lazim pada organisasi nir

laba yang didanai oleh pemerintah; banyak
entitas pemerintah dan organisasi nir laba
yang menerima bantuan keuangan dari
pemerintah harus diaudit dengan audit
ketaatan. Audit yang demikian dirancang untuk
menentukan apakah bantuan keuangan
dibelanjakan sesuai dengan peraturan
perundangan yang berlaku;
Slide 1.50
Slide 1.51
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.
Slide 1.52
Internal Auditor
•Banyak perusahaan besar membentuk unit audit
internal yang staf audit internalnya cukup banyak.
•Tugasnya adalah untuk menginvestigasi dan menilai
efektivitas operasi perusahaan; banyak perhatian
diberikan pada penilaian terhadap pengendalian
internal;
•Sebagian besar pekerjaannya mencakup audit
operasional di samping juga melakukan audit ketaatan;
•Di banyak negara, auditor internal dilibatkan dalam
audit keuangan. Dalam keadaan yang demikian, auditor
eksternal harus mereview pakerjaan yang telah dilkukan
oleh auditor internal;
Slide 1.53
• Bagaian audit internal membuat laporan yang

ditujukan secara langsung kepada direktur
utama atau komisaris;
• Auditor internal harus independen terhadap
pimpinan departemen dan eksekutif lain yang
direview;
• Auditor internal tidak pernah independen
dalam pengertian sebagai auditor independen
karena dia tetap sebagai pegawai perusahaan
yang melakukan pemeriksaan;
• Auditor internal memiliki dua pengaruh utama
ketika mengaudit atas laporan keuangan:
Slide 1.54
1. Keberadaan dan pekerjaannya

mempengaruhi sifat, waktu, dan luasnya
prosedur audit;
2. Auditor eksternal bisa menggunakan auditor
internal untuk menyediakan bantuan
langsung dalam pelaksanaan audit; jika ini
terjadi, auditor eksternal harus menilai
kompetensi auditor internal (pendidikan,
pengalaman, sertifikasi profesional) dan
obyektivitas (status organisasional di dalam
perusahaan);
Slide 1.55
Slide 1.56
Slide 1.57
Slide 1.58
Slide 1.59
Independent External Auditor: Training,

Licensing and Authority
• Auditor independen memiliki tanggungjawab
utama untuk melakukan fungsi audit atas
laporan keuangan yang diterbitkan untuk
perusahaan publik dan perushaan non publik;
• Beberapa negara memiliki kelompok auditor
yang fungsi – fungsinya berbeda;
• Auditor independen disertifikasi oleh
organisasi profesi atau lembaga negara;
• Sumber otoritas fungsi atestasi berasal dari
perundangan;
Slide 1.60
Slide 1.61
Certification of the Auditor
• Certified Public Accountant

(CPA)
• Chartered Accountant (CA)
• Contador Público (CP)
• Other
Slide 1.62
Management Assertions and Audit

Objectives
• The audit starts with the financial statements
prepared by the client and the claims or
“assertions”. that the client makes about these
numbers.
• It is the auditor's job to validate management's
assertions. In order to do so, the auditor will
identify audit objectives, which can be
regarded as the auditor's counterpart of
management assertions.
Slide 1.63
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 company’s
financial statements are
prepared based on
international financial
reporting standards.”
Slide 1.64
Assertions about classes of transactions and events for the

period under audit
 Occurrence. Transaction and events that have been

recorded have occurred and pertain to the entity.
 Completeness – All transactions and events that
should have been recorded have been recorded..
 Accuracy - Amounts and other data relating to
recorded transactions and events have been recorded
appropriately.
 Cutoff - Transactions and events have been recorded
in the correct accounting period.
 Classification - Transactions and events have been
recorded in the proper accounts.
Slide 1.65
Assertions about account balances at the period end.
 Existence:- Assets, liabilities and equity interests exist.

 Rights and obligations:- An entity holds or controls
the rights to assets, and liabilities are the obligations
of the entity.
 Completeness—All assets, liabilities and equity
interests that should have been recorded have been
recorded
 Valuation and allocation —Assets, liabilities, and
equity interests are included in the financial
statements at appropriate amounts and any resulting
valuation or allocation adjustments are appropriately
recorded.
Slide 1.66
Assertions about presentation and disclosure
 Occurrence and rights and obligations—Disclosed

events, transactions, and other matters have occurred
and pertain to the entity.
 Completeness—All disclosures that should have been
included in the financial statements have been
included..
 Classification and understandability—Financial
information is appropriately presented and described,
and disclosures are clearly expressed.
 Accuracy and valuation—Financial and other
information are disclosed fairly and at appropriate
amounts.
Slide 1.67
Slide 1.68
Audit Process Model
• Phase I - Client Acceptance

• Phase II - Planning
• Phase III - Testing and Evidence
• Phase IV - Evaluation and
Judgment
Slide 1.69
Phase I Client Acceptance
Objective: The client acceptance phase of the

audit plan, Phase I, involves deciding whether to
accept a new client or continue with an existing
one.
Procedures: (1) Evaluate the client's background and
reasons for the audit. (2) Determine whether the
auditor is able to meet the ethical requirements
regarding the client. (3) Determine need for other
professionals. (4) Communicate with predecessor
auditor; (5) Prepare client proposal. (6) Select staff to
perform the audit, and (7) Obtain an engagement
letter.
Slide 1.70
Phase II Planning the audit
Objective: Determine the amount and type of

evidence and review required to give the auditor
assurance that there is no material misstatement
of the financial statements.
Procedures (1) Perform audit procedures to understand
the entity and its environment, including the entity’s
internal control; (2) Assess the risks of material
misstatements of the financial statements. (3)
Determine materiality; and (4) Prepare the planning
memorandum and audit program, containing the
auditor’s response to the identified risks.
Slide 1.71
Phase III Testing and Evidence
• Objective Test for evidence supporting

internal controls and the fairness of the
financial statements.
• Procedures: (1) Tests of controls; (2)
Substantive tests of transactions; (3)
Analytical procedures; (4) Tests of details of
balances. (5) Search for unrecorded liabilities.
Slide 1.72
Slide 1.73
Phase IV, Evaluation and Reporting
Objective: Complete the audit procedures

and issue an opinion.
Procedures: (1) Evaluate governance evidence;
(2) Perform procedures to identify subsequent
events; (3) Review financial statements and
other report material; (4) Perform wrap-up
procedures; (5) Prepare Matters of Attention
for Partners; (6) Report to the board of
directors; and (7) Prepare Audit report.
Slide 1.74
International Public Accouting Firms
“The Big Four”:

Deloitte & Touche; PricewaterhouseCoopers;
Ernst & Young; KPMG
Audit Staff
Staff Accountants (or Junior Assistants then Senior)
Senior Accountants (or Supervisor)
Managers
Partners/Directors
Slide 1.75
Slide 1.76
Thank You for Your Attention
Any Questions?

International Auditing Overview: Principles of Auditing: An Introduction To International Standards On Auditing - Ch. 1

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International Auditing Overview: Principles of Auditing: An Introduction To International Standards On Auditing - Ch. 1

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Slide 1.

International Auditing Overview

Rick Stephan Hayes,

Brief history of auditing

• The attitude of profit maximization from

Auditing Standards and Regulation are Rapidly Changing

The auditor, corporations and Financial

By the audit process, the auditor enhances the

The function of auditing is to lend credibility to the financial

 Is the company a going concern?

International Financial Reporting Standards

• International Financial Reporting Standards (IFRS)

Advantages of International Auditing

International Auditing and Assurance Standards Board (IAASB)

• International Standards on Auditing (ISAs) as the standards

Daftar ISAs 2013

402 Audit Considerations Relating to Entities Using

600-699 Using Work Of Others ISAs

• 2000-2699 International Standards on Review Engagements

ISA 200 states the objective of an audit of

• Public Interest Oversight

• Role of the IAASB CAG

• Tujuan IAASB secara suka rela mendapat pengakuan dan

• Dewan IFAC mengawasi manajemen

ISA Sebagai Harmonisasi Standar

• Praktik dan teori audit internasional mencakup

“An audit is a systematic process of

Components of the Audit Definition

• An audit is a Systematic approach. The audit

• An audit is conducted objectively. And audit is an

• The evidence obtained and evaluated by the auditor

• The auditor examines the evidence for the assertion

General Principles Governing an Audit of FS

• Although a public auditor can also examine

• Objective, Purpose and Characteristics of a FS Audit

An audit conducted in accordance with ISAs and relevant

• Judgment about materiality are made in the light of

- Obtain sufficient appropriate audit evidence about

Limitation of the Audit

• There are certain inherent limitation in an audit that effect

Risk in FS, Transactions, Account Balances

These consideration directly assist in determining the nature,

General Principles Governing an Audit of

 An auditor should comply with the Code of

General Principles Governing an Audit of Financial

 Scope of an audit - the audit procedures deemed

Business Risk and Audit Risk

Audit of Financial Statements

• Rekomendasi umumnya ditujukan kepada

• Personalia akuntansi, sebagai contoh, dievaluasi

• Audit ketaatan juga lazim pada organisasi nir

• Internal auditors are employed by individual

• Bagaian audit internal membuat laporan yang

1. Keberadaan dan pekerjaannya

Independent External Auditor: Training,

Certification of the Auditor

• Certified Public Accountant

Management Assertions and Audit

Assertions about classes of transactions and events for the

 Occurrence. Transaction and events that have been

Assertions about account balances at the period end.

 Existence:- Assets, liabilities and equity interests exist.

Assertions about presentation and disclosure