ISA 200 (3)

Question 1

What is professional judgement?

Answer 1

Application of relevant training, knowledge and experience in making informed decisions in an audit engagement

Question 2

What does ISA 200 require?

Answer 2

The auditor to exercise professional judgement in planning and performing an audit of financial statements

Question 3

Professional judgement (materiality)

Answer 3

Determining the level of audit risk and setting materiality

Question 4

Professional judgement (procedures)

Answer 4

Determing the nature, timing and extent of audit procedures to be performed

Question 5

Professional judgement (sufficient appropriate)

Answer 5

Evaluating whether sufficient appropriate audit evidence has been obtained

Question 6

Professional judgement (framework)

Answer 6

Evaluating management’s judgements in applying the applicable financial reporting framework

Question 7

Professional judgement (conclusions)

Answer 7

Drawing conclusions based on the audit evidence obtained

Question 8

What do the ISAs require?

Answer 8

Auditors to adopt a risk-based approach to auditing

Question 9

What must the auditor do? (client)

Answer 9

Analyse the risk in client’s business, transactions and systems that could lead to material misstatement

Question 10

What must the auditor do? (testing)

Answer 10

Direct audit testing to risky areas