A5 (1 -2 )- Integrated Audit Flashcards Preview

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Flashcards in A5 (1 -2 )- Integrated Audit Deck (10):
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Auditor requirements

1). Plan the engagement to achieve both of financial statements audit and management assessment of effectiveness of internal control over financial reporting.

2). Test of controls designed to provide sufficient evidence for opinion on internal control and control risk assessment.

1

INTEGRATED AUDITS (issuers vs. non issuers)

Under PCAOB standards/, auditors of issuers are required to perform an integrated audit, auditing both the financial statements and management's assessment of the effectiveness of internal control over financial
reporting

SSAEs/ allow an auditor to examine and report on a nonissuer's internal control over financial reporting that is integrated with a financial statement audit.

2

Management requirements

1). Establishing and maintaining an adequate control structure.
2). Evaluate effectiveness of internal control
3). Provide evidence supporting design and monitoring of its internal controls.
4) provide representation letter to the auditor about all responsibilities

3

Planing the engagement

Developing overall strategy for the scope and performance based in following :-
1). Industry,business, and operations
2). Prior knowledge of entities internal control.
3). Management method evaluating its controls
4). Materiality and risks
5). Previously communicated deficiencies
6). Nature and extent of available evidence
7). Fraud risk assessment.
8). Using of work of others

4

Top-Down approach test of controls

Evaluate overall risks at the financial statement levels consider controls at entity level, and then focus on accounts or disclosures for which there is possibly misstatements.

5

Tests of control

1). Evaluate the design of effectiveness of controls for entity's objectives

2). Test the operating effectiveness of controls .

6

Evaluating control deficiencies ( significant deficiencies or material weakness , or combination)

1). The magnitude of potential misstatement resulting from deficiency

2). The like hood that the control will prevent or detect a material misstatement

7

Forming an opinion and evaluating the management report.

The management report should include the following :-

1). Management resonsiblity
2). Describe the subject matter of the examination ( FS preparation )
3). Criteria used by management of measurement
4). Management assertion
5). List of significant deficiencies

8

COMMUNICATION OF DEFICIENCIES IN INTERNAL CONTROL

Summary Chart

9

COMMUNICATION OF DEFICIENCIES IN INTERNAL CONTROL (ISSUER)

Summary Chart