audit useful set

• Accessibility of information (Cannot access the underlying data)
• Conflicting interests or goal inconsistencies between information provider and information users
• Complex and voluminous of information

• Reducing information risks
• Enhancing credibility of financial information (management is also one intended user)
• Ensuring that management performs its stewardship function (using their assets in proper manner)
• Reducing agency risks
• Providing reliable information for the participants of capital market

• Nature of financial reporting
• Accessibility of audit evidence
• Time limit to complete an audit at a reasonable cost
• Variation in the judgment about sufficient and appropriate audit evidence

• an engagement in which a (1) practitioner (2) expresses a conclusion designed to enhance the degree of confidence of the (1) intended users other than the (1) responsible party about the (3) outcome of the evaluation or measurement of (4) a subject matter (identifiable, capable of consistent evaluation or measurement) against (5) criteria .;
• a more inclusive

• Be independent of the audit client and comply with ethical requirements
• Plan and perform an audit with an attitude of professional skepticism and exercise appropriate professional judgment
• Carry out audit procedures in accordance with auditing standards and relevant legislation
• Obtain sufficient appropriate audit evidence to form audit opinion

• maintain independence from their client
• duty to act in a professional manner
• Provide a reasonable level (cannot be negligent) of care while performing the audit function

• Materiality and audit risk
• Nature (AR -> confirmation or vouching), timing (when to observe stock take) and extent (how many samples) of audit procedures to be performed
• Whether sufficient appropriate audit evidence has been obtained
• Evaluating judgments in applying accounting standards and accounting estimates (reasonableness)
• Draw conclusions based on evidence obtained

• Questioning contradictory evidence
• Considering reliability of evidence
• Evaluating sufficiency and appropriateness of audit evidence
• Take into account past experience of the honesty and integrity of management

• Evaluate whether sufficient and appropriate audit evidence regarding the assessed RMM due to fraud has been accumulated
• Communicate to management and those charged with governance, where appropriate, about matters relating to the fraud on a timely basis
• Document the significant decisions and RMM due to fraud and also the responses (including audit procedures performed) in response to such risks

• Ensure the strategic guidance of the company, the effective monitoring of management by the board and the board’s accountability to the company and the shareholders
• Protect and facilitate the exercise of shareholders’ rights, ensure the equitable treatment of all shareholders and recognise the rights of stakeholders and promote transparent and efficient markets
• Ensure the timely and accurate disclosure of important matters

• Appropriate composition of directors with sufficient relevant experience (will ensure the directors are qualified)
• Integrity is a fundamental requirement in choosing directors
• There is appropriate level of independence
• There is a code of conduct for employees to follow
• The board of directors will have some committees to make important decisions

• Increase public confidence in the credibility of the company’s financial reports
• Help directors to discharge their responsibilities
• Strengthen the independent position of a company’s external auditor
• Ensure the effectiveness of the internal audit function

• Helps to ensure the quality of financial information of the company
• Reviews internal controls
• Enhances the effectiveness of the internal audit function
• Promotes the independence of external auditors

• Integrity
• Objectivity
• Professional competence and due care
• Confidentiality
• Professional behavior

• Self-interest threats
• Self-review threats
• Advocacy threats
• Familiarity threat
• Intimidation threats

• Educational, training and experience requirements
• Continuing professional development requirements
• Professional standards
• Professional or regulatory monitoring and disciplinary procedures
• External review

• Documented policies and procedures about the compliance with the fundamental principles
• Leadership of the firm that stresses the importance of compliance with the fundamental principles
• Quality control policies and procedures implementation and monitoring

• Having a professional accountant who was not a member of the team to review the work performed
• Consulting an independent third party
• Rotation of senior assurance team personnel

• Occurrence - have been occurred
• Completeness - have been recorded
• Accuracy - correct amount
• Cut-off - correct accounting period
• Classification- properly classified and recorded in the proper accounts

• Existence
• Completeness
• Rights and obligations - rights to assets and liabilities
• Valuation and allocation - valuation or allocation adjustments are appropriately recorded

• Occurrence and rights and obligations
• Completeness
• Classification and understandability
• Accuracy and valuation

The chance of the FS contains errors due to nature of the item the nature of client and the nature of the economy

Definition: Representations by management, explicit or otherwise, that are embodied in the financial statements, as used by the auditor to consider the different types of potential misstatements that may occur

The risk that the procedures performed by the auditor will not detect a misstatement that exists

omitting it or misstating it could influence decisions that users make on the basis of financial information

• RMM
• Quality of the audit evidence (reliability)
• Experience from previous audit (if the client is new, gather more evidence)
• Sampling method selected (if random sampling is not used, you may need to gather more evidence)

• Source of audit evidence (where does it come from – inside [e.g. client generated document] or outside of the company [e.g. bank statement, more reliable])
• Nature of audit evidence (written vs. oral evidence) (original vs. photocopies)
• Effectiveness of client’s internal controls
• Qualification of information provider (who provided the information – is it objective, does he have the knowledge)

• The purpose of audit procedures
• The assertions under consideration
• Timing of collecting the evidence

• Planning stage – determine the amount of evidence needed
• Evaluating findings – misstatements identified, projected, combined and compared with the preliminary judgment about materiality set during the planning stage
• End of audit – considers it because it affect opinions

• Risk assessment and planning- Identify unusual areas to focus on
• Testing of transactions and account balances- Not all the accounts are tested using test of details due to Time concern
• Overall review of financial statements and audit completion- Identify anything unusual after all adjustments and all remaining unusual area are explained

• Comparisons of the entity’s financial information with prior periods, anticipated results or industry averages
• Relationship among or between elements of financial statements (ratio analysis) or between financial and non-financial information

• Organisational status and objectivity of the internal audit function
• Competence of the internal audit function
• Approach of planning and performing the internal audit assignment