A3 (2) - PLANNING AND SUPERVISION Flashcards Preview

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Flashcards in A3 (2) - PLANNING AND SUPERVISION Deck (10):
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I. FIRST STANDARD OF FIELDWORK - Planning

1- Obtain knowledge of the client's business and industry
2- Develop the audit strategy
3- Develop the audit plan

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I. FIRST STANDARD OF FIELDWORK - Supervision of Assistants

1- Communicating to audit team for material misstatement
2-Informing assistants their responsibilities, objectives
3- Reviewing the work performed by assistants
4- The complexity of the subject matter
5- The qualifications of the assistants.
6- Documenting their disagreement if not resolved

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II. KNOWLEDGE OF THE CLIENT'S BUSINESS AND INDUSTRY - Client's Industry

1- AICPA accounting and audit guides;
2. Trade publications and professional trade associations;
3. Government publications; and
4. AICPA Accounting Trends and Techniques

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II. KNOWLEDGE OF THE CLIENT'S BUSINESS AND INDUSTRY - Client's Business

1- Tour Client Facilities
2- Review the Financial History of the Client
3- Obtain an Understanding of Client Accounting
4- Inquire of Client Personnel

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III. DEVELOPING THE AUDIT STRATEGY - Overall Audit Strategy

1- The involvement other auditors, specialists, etc.
2-The assignment of staff to specific audit areas,
3- The timing of testing (interim vs. year-end) & meetings
4- The budget hours to assign to specific audit areas
5- The ex1ent, location, and timing of reviews

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III. DEVELOPING THE AUDIT STRATEGY - Scope of the Audit

1. Specific, regulatory & statutory reporting requirements
2.The size and complexity of the entity
3- The effect of information technology
4- Knowledge gained from prior experience
5- The use of service organizations by the entity

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III. DEVELOPING THE AUDIT STRATEGY - Materiality

1- Needs of Users
2- Preliminary Assessment of Materiality
3- Revising the Assessment of Materiality

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III. DEVELOPING THE AUDIT STRATEGY - Tolerable Misstatement

Tolerable misstatement should be less than the materiality level for the financial statements as a whole, or, if applicable under PCAOS standards, the materiality level or levels for particular accounts or disclosures.

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IV. DEVELOPING THE AUDIT PLAN - Audit Procedures

1. Risk Assessment Procedures
2.Tests of Controls
3. Substantive Procedures
4. Other Audit Procedures

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IV. DEVELOPING THE AUDIT PLAN - Timing of Audit Procedures

incremental risk should be considered if sufficient alternative procedures exist to extend the interim conclusions to year-end.