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ISA 230 Flashcards

(39 cards)

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1
Q

What is Audit Documentation / Working papers?

A

Written record of

  • Procedures performed
  • Evidence obtained
  • Conclusions reached
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2
Q

What are Audit Files?

A

Folders in physical or electronic form containing audit documentation for whole engagement

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3
Q

What are the types of Audit Files?

A
  • Current files
  • Permanent files
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4
Q

What is the rule of working papers?

A

Audit documentation shall be sufficient to enable an Experienced Auditor having NO previous connection with the audit to understand:

  • procedures performed (+ nature, timing, extent)
  • evidence obtained
  • conclusions reached (+ significant matters arising during audit + significant judgements made in reaching conclusions)
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5
Q

Who is an Experienced Auditor?

A

Individual with practical audit experience + reasonable understanding of:

  • Audit processes
  • ISAs and applicable regulatory requirements
  • Business environment in which entity operates
  • Auditing and financial reporting issues relevant to entity’s industry
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6
Q

What is the Primary Purpose of working papers

A

Provide evidence that

  • Audit is planned and performed in accordance with ISAs and regulatory requirements
  • Auditor has appropriate basis for opinion in audit report and achievement of overall objectives
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7
Q

What are additional / secondary purposes of working papers?

A
  • Assist engagement team in planning and performance of audit
  • Assist seniors in direction, supervision and review of audit team
  • Enable quality control reviews
  • Enable accountability of engagement team for its work
  • Retain a record of matters of continuing significance to future audits
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8
Q

Primary vs Secondary purpose of working papers: Assist engagement time in planning and performance

A

Secondary

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9
Q

Primary vs Secondary purpose of working papers: Assist seniors in direction, supervision, review

A

Secondary

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10
Q

Primary vs Secondary purpose of working papers: Enable QCRs

A

Secondary

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11
Q

Primary vs Secondary purpose of working papers: Enable accountabililty

A

Secondary

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12
Q

Primary vs Secondary purpose of working papers: Retain record of matters of continuing significance for future audits

A

Secondary

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13
Q

Primary vs Secondary purpose of working papers: Provide evidence of planning and performance in accordance with ISAs + regulatory requirements

A

Primary

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14
Q

Primary vs Secondary purpose of working papers: Provide evidence of auditor having appropriate basis for opinion in report

A

Primary

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15
Q

Primary vs Secondary purpose of working papers: Provide evidence for achievement of overall objectives

A

Primary

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16
Q

Should working papers be produced on timely basis?

17
Q

Why should working papers be produced on timely basis?

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A
  • Enhances quality of audit
  • Enhances accuracy of working papers
  • Facilitates effective review of procedures performed, evidence obtained, conclusions reached
18
Q

What are the factors that affect form, content, and extend of working papers?

Study These Flashcards
A
  • Size and Complexity of Entity
  • Risk identified
  • Nature of procedures performed
  • Significance of evidence obtained
19
Q

What shall auditor document in respect of Procedures Performed?

Study These Flashcards
A
  • Identifying characteristics of specific items tested / procedure
  • Who performed work + date
  • Who reviewed work + date
20
Q

What shall auditor document in respect of Significant Matters?

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A
  • Nature
  • Discussion with Management, TCWG, External parties + When discussion too place
21
Q

What is Completion Memorandum?

Study These Flashcards
A

Document that describes

  • Significant matters identified during audit
  • How they were addressed (or references to documentation that provide this information)
22
Q

What is the function of documentation of professional judgement?

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A
  • Explains auditor’s conclusion
  • Useful in QCR
  • Useful in subsequent audits
23
Q

Audit procedure vs Identifying characteristics: Selecting high value items from a population

Study These Flashcards
A

Audit procedure

24
Q

Audit procedure vs Identifying characteristics: All journal entries over Rs. 50,000 from the purchase journal

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A

Identifying characteristics

25
Audit procedure vs Identifying characteristics: Systematic selection from a population
Audit procedure
26
Audit procedure vs Identifying characteristics: Started with voucher#23 and selected every 125th voucher from the sales journal
Identifying characteristics
27
Audit procedure vs identifying characteristics: Inquiries of specific entity personnel
Audit procedure
28
Audit procedure vs identifying characteristics: Inquired from Mr. Ali (CFO) in a meeting dated January 7, 2012
Identifying characteristics
29
In which circumstances, it is appropriate to document professional judgement (when significant)?
- Determination of reasonableness in areas of subjectivity (estimates) - Determination of KAM - When authenticity of document was in doubt
30
If auditor departs from a relevant requirement of an ISA, what shall auditor document?
- Reason of departure - How alternative procedures achieved aim of requirement
31
If exceptional circumstances occur after auditor's report (e.g. subsequent event / misstatement), does auditor perform new procedures?
Yes
32
If exceptional circumstances occur after auditor's report, how will new procedures be documented?
- Specific reasons for making change - Procedures performed - Evidence obtained - Conclusions reached - Their effect on auditor's report - Who made changes + when - Who reviewed changes + when
33
What is the appropriate time for completion of assembly of audit file
60 days after date of auditor's report
34
What is the appropriate time for retention of audit file?
Should not be shorter than 5 years from date of auditor's report or date of group auditor's report, whichever is later
35
What type of process is assembly of audit file
Administrative process
36
What kind of changes does assembly of audit file include?
- Adding / replacing documentation for evidence which has been obtained prior to auditor's report - Deleting superseded pages - Deleting duplicate pages - Sorting working papers - Cross referencing working papers - Sign-off completion checklist
37
Can an auditor make changes in documentation after file assembly period?
Yes, if it is necessary E.g. there is a need to clarify existing documentation from comments received during QCR
38
In smaller entity, where engagement partner performs all the audit work, will documentation include matters related to direction, supervision, review?
No
39
Can an auditor of smaller entity record various aspects of audit together in a single document? If so, how?
Yes Single document with cross reference to working papers e.g. - Audit Strategy - Audit Program - Materiality - Risk assessment - Significant matters - Conclusions reached

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