Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Page 1 | Confidential and Proprietary Information
Tips for Trainers—
Understanding the ISAs and
Using Them Effectively
Phi...
Page 2 | Confidential and Proprietary Information
Where Are We today?
• Change, Change, Change
• But is it an auditing par...
Page 3 | Confidential and Proprietary Information
Option #1
• Panic and bail
Page 4 | Confidential and Proprietary Information
Option #2
• Head in the sand
©
Page 5 | Confidential and Proprietary Information
Option #3
• Study, ponder and decide
Need to decide:
– Can you reduce au...
Page 6 | Confidential and Proprietary Information
Structure of the ISAs
• Preface
• Scope and Authority
• Glossary
• Terms...
Page 7 | Confidential and Proprietary Information
ISA Structure
Scope 10
Objectives 2
Definitions 1
Requirements 11
Applic...
Page 8 | Confidential and Proprietary Information
You Need Only to Comply with:
• Relevant ISAs [200.18]
• Relevant Requir...
Page 9 | Confidential and Proprietary Information
ISA 210—Agreeing the Terms of Engagement
Why is it so long? Needs to cov...
Page 10 | Confidential and Proprietary Information
Categorizing Requirements
Response
required by the
audit team?
Action i...
Page 11 | Confidential and Proprietary Information
What in ISA 210 is Relevant to Every Micro-Entity Audit?
Para 6 
Para ...
Page 12 | Confidential and Proprietary Information
Making the Standards Work for You #1
Risk Management
• 210.06
– Will ma...
Page 13 | Confidential and Proprietary Information
Making the Standards Work for You #2
Communication
• 210.06
– Does mana...
Page 14 | Confidential and Proprietary Information
Making the Standards Work for You #3
Audit Efficiency
• 220.14
– Do you...
Page 15 | Confidential and Proprietary Information
How to Deal with All This Material
• Treat it as an exercise in change ...
Page 16 | Confidential and Proprietary Information
Summary
• You need to understand all the ISAs so you can:
– Tailor them...
www.ifac.org/SMP
Upcoming SlideShare
Loading in …5
×

Phil Cowperthwaite Tips for Trainers Understanding the ISAs and Using Them Effectively

681 views

Published on

SMP Committee Train the Trainers' Seminar in Kampala, Uganda, June 4, 2013

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

Phil Cowperthwaite Tips for Trainers Understanding the ISAs and Using Them Effectively

  1. 1. Page 1 | Confidential and Proprietary Information Tips for Trainers— Understanding the ISAs and Using Them Effectively Phil Cowperthwaite, Member, IFAC SMP Committee Trainers’ Seminar Kampala, Uganda June 4, 2013
  2. 2. Page 2 | Confidential and Proprietary Information Where Are We today? • Change, Change, Change • But is it an auditing paradigm shift? – ISAs – New GAAPs – Ethics • Likely not
  3. 3. Page 3 | Confidential and Proprietary Information Option #1 • Panic and bail
  4. 4. Page 4 | Confidential and Proprietary Information Option #2 • Head in the sand ©
  5. 5. Page 5 | Confidential and Proprietary Information Option #3 • Study, ponder and decide Need to decide: – Can you reduce audit risk sufficiently? – Is auditing a viable service for your firm?
  6. 6. Page 6 | Confidential and Proprietary Information Structure of the ISAs • Preface • Scope and Authority • Glossary • Terms applicable to the standards • ISQC1 • QC for firms covers assurance only • CASs • 36 in all , 570+ requirements (incl. ISQC1)
  7. 7. Page 7 | Confidential and Proprietary Information ISA Structure Scope 10 Objectives 2 Definitions 1 Requirements 11 Application Material 76 100 ISA 200 # of paragraphs
  8. 8. Page 8 | Confidential and Proprietary Information You Need Only to Comply with: • Relevant ISAs [200.18] • Relevant Requirements [200.22] • But you do need to comply with all of these in every audit
  9. 9. Page 9 | Confidential and Proprietary Information ISA 210—Agreeing the Terms of Engagement Why is it so long? Needs to cover: 1. Every type of audit engagement 2. Every size of reporting entity 3. Every mix of management/TCWG 4. Every type of reporting framework 5. Every country globally 6. Every form of legal/regulatory regulations
  10. 10. Page 10 | Confidential and Proprietary Information Categorizing Requirements Response required by the audit team? Action is required in every audit If the circumstance is identified action is required •A state of being or •Reference to another ISA Documentation required? Action and conclusion must always be documented Document only if circumstance exists No specific documentation required Impact on checklists Include in a standard checklist in every audit Include in a checklist only if the condition exists Do not include in checklist in any audit
  11. 11. Page 11 | Confidential and Proprietary Information What in ISA 210 is Relevant to Every Micro-Entity Audit? Para 6  Para 9 and 10  Preconditions Mutual acknowledgment 16 requirements and only 3 relevant every time
  12. 12. Page 12 | Confidential and Proprietary Information Making the Standards Work for You #1 Risk Management • 210.06 – Will management play ball? – What does “taking responsibility” look like? – How much pre-audit assistance is allowable? • 220.09 – Have you covered off the familiarity threat? • ISQC1.26 – Do you trust your client? • 220.12.14 – Do you have the necessary skills?
  13. 13. Page 13 | Confidential and Proprietary Information Making the Standards Work for You #2 Communication • 210.06 – Does management understand its role? – Have you or your staff talked with them about it? • 210.09 – Have TCWG and management actually read the engagement letter? • 200.11 – Do you understand your role?
  14. 14. Page 14 | Confidential and Proprietary Information Making the Standards Work for You #3 Audit Efficiency • 220.14 – Do you have the skills and knowledge? – Is it industry and sector specific? • 210.06 – Does management understand it’s role? • 220.14 – Do you have the time? – Are the fees appropriate?
  15. 15. Page 15 | Confidential and Proprietary Information How to Deal with All This Material • Treat it as an exercise in change management • Appoint a team leader • Determine requirements relevant to your audit • Take time to digest it all • Talk to your colleagues and clients now
  16. 16. Page 16 | Confidential and Proprietary Information Summary • You need to understand all the ISAs so you can: – Tailor them to the specific circumstances of your practice – React appropriately to unusual circumstances – Communicate effectively with your clients – Reduce engagement risk – Make your audits as efficient as possible
  17. 17. www.ifac.org/SMP

×