Audit process Explains how to do audit that include audit acceptance, audit planning, audit testing and evidence and audit Reporting

2.  Phase I - Client Acceptance
 Phase II - Planning
 Phase III – Field work/Testing and
Evidence
 Phase IV – Reporting/Evaluation and
Judgment
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3. Objective:
The client
acceptance
phase of the
audit plan,
Phase I,
involves
deciding
whether to
accept a new
client or
continue with
an existing
one.
• Evaluate the client's background
and reasons for the audit.
• Determine whether the auditor is
able to meet the ethical
requirements regarding the client.
• Determine need for other
professionals.
• Communicate with predecessor
auditor;
• Prepare client proposal.
• Select staff to perform the audit,
and Obtain an engagement letter.
Procedures:
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4. Objective:
Determine the
amount and
type of
evidence and
review
required to
give the
auditor
assurance that
there is no
material
misstatement
of the financial
statements.
• Perform audit procedures to understand
the entity and its environment, including
the entity’s internal control;
• Assess the risks of material
misstatements of the financial
statements.
• Determine materiality; and
• Prepare the planning memorandum and
audit program, containing the auditor’s
response to the identified risks.
Procedures
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5. Objective Test for evidence supporting internal controls and the fairness of the
financial statements.
Procedures:
(1)Tests of controls;
(2) Substantive tests of transactions;
(3) Analytical procedures;
(4)Tests of details of balances.
(5) Search for unrecorded liabilities.
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6. Objective: Complete the audit procedures and issue an
opinion.
Procedures:
• Evaluate governance evidence;
• Perform procedures to identify subsequent events;
• Review financial statements and other report material;
• Perform wrap-up procedures;
• Prepare Matters of Attention for Partners;
• Report to the board of directors; and
• Prepare Audit report.
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