Risk Assessment

Question 1

What should auditor do during the planning stage?

Answer 1

Fully assess risks associated with not-for-profit organisation

Question 2

What is generally the case?

Answer 2

Certain risks applicable to not-for-profit organisations that might not necessarily be applicable to other small companies

Question 3

What do small not-for-profit organisations generally suffer from>

Answer 3

Internal control deficiencies common to small enterprises

Question 4

Common examples of internal control deficiencies>

Answer 4

Lack of segragation of duties and use of unqualified staff

Question 5

Where may shortcomings arise?

Answer 5

The staff’s lack of training and if they’re volunteers and may hate formal procedures

Question 6

What do auditors have to consider? (assurance)

Answer 6

Whether they can obtain adequate assurance that accounting records do reflect all transactions of enterprise

Question 7

What do auditors bear in mind? (reporting)

Answer 7

Whether there are any related statutory reporting requirements

Question 8

Why can obtaining audit evidence from not-for-profit organisations be a problem?

Answer 8

Because particularly where organisations have informal arrangements and therefore this impacts auditor’s report