Summary
Summary AUE3701 notes
- Institution
- University Of South Africa (Unisa)
Summary of 27 pages for the course AUE3701 - Audit Planning and Tests of Controls at Unisa (AUE3701 notes)
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By: Sharifa17 • 4 year ago
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Aue3701AUDITING:
The needs for auditors:
▪ Provide independent opinion about annual financial statements
▪ Not 100% correct
▪ Auditors provides assurance to the users that the information in financial
statements is reliable
▪ Statutory – required to be audited, PBI > 350 points
▪ Non-statutory – voluntarily
▪ Shareholders are the main users
Objective of an audit:
▪ Express an opinion whether financial statements fairly present, in all material
aspects
▪ Opinion must be supported by evidence
Assurance
▪ Reasonable – high but not 100%
▪ Limited – negative conclusion
▪ None – no opinion given
Inherent limitations of an audit:
▪ Auditing involves professional judgement
▪ Use of sample testing rather than testing everything
▪ Evidence is persuasive rather that conclusive
Elements of an assurance engagement:
▪ 3 party relationship; practitioner, management and user
▪ Subject matter; what are we auditing
▪ Suitable criteria; IFRS
- Relevant
- Complete
- Neutral
- Understandable
▪ Evidence
- Sufficient; quantity
- Appropriate; quality
▪ Report; document containing the opinion
, Professional scepticism:
▪ Using the knowledge and experience I have to make appropriate decisions
QUALITY CONTROL:
Elements:
▪ Leadership responsibilities for quality within the firm
- Partner is responsible for all aspects of quality
▪ Relevant ethical requirements
- Code of professional conduct adhered to
- Deal with non-compliance
- Independence!
▪ Acceptance and continuance of client relationships
- Procedures to obtain information about client integrity and compliance with
ethical requirements
▪ Human resources
- Sufficient personnel with competence
▪ Engagement teams and performance
- Consultation and differences of opinion
- Engagement quality control review
- Team collectively have knowledge
▪ Monitoring
- Adhere to policies
ASSERTIONS:
TRANSACTIONS BALANCES
Complete Complete
Occurrence Rights and obligations; Rights to asset
and obligations to liability
Cut-off Existence; assets
Classification; disclosed and correct Valuation
account
Accuracy
Presentation and disclosures Presentation and disclosures
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