This slide presentation has been prepared by the IAASB’s Auditor Reporting Implementation Working Group to assist IAASB members, national standard setters, auditors and others promote awareness of the new and revised Auditor Reporting standards within their respective jurisdictions.
The document provides an overview of the new and revised International Standards on Auditing regarding auditor reporting that were released in January 2015 and become effective for audit periods ending on or after December 15, 2016. Key changes include requiring auditors to communicate Key Audit Matters in their reports for listed entities, enhancing reporting on going concern matters, and other changes to the format and content of audit reports. The slides describe these new standards and their objectives to improve auditor communications and the informativeness of audit reports for users.
James Gunn, Managing Director, Professional Standards, addresses the 6th Brazilian Conference on Accounting and Independent Auditing June 13, 2016, in Sao Paolo, Brazil.
This document discusses audit evidence and audit procedures in Chapter 6 of the textbook "Modern Auditing: Assurance Services and the Integrity of Financial Reporting". It defines audit evidence and the five management assertions auditors consider. It describes transaction and account balance audit objectives and how materiality, risk, population size and characteristics affect sufficiency of evidence. The document outlines types of audit procedures like inspection, observation, inquiry and analytical procedures. It discusses documenting procedures in audit programs and working papers and reviewing work.
The document discusses changes to the auditor's report to make it more informative for users. Key changes include requiring the audit opinion to be presented first, including key audit matters (KAM) for listed entities, providing additional focus on going concern assessments, and including a new section on other information. KAM are matters of most significance to the audit determined based on risk assessments, significant judgments, and significant events/transactions. Not all matters will be included in every report. Resources are provided to help with implementation of the new standards, which are effective for periods ending after December 15, 2016.
An orientation slide deck on the IFAC SMP Committee's Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities (ISA Guide) that IFAC member bodies may use in training and orientation seminars to introduce staff and members to the ISA Guide.
This document discusses the fundamentals and purpose of financial statement audits. It outlines the relationship between accounting and auditing, the need for audits due to conflicts of interest and complexity, and theories like agency theory that explain the purpose of audits. The document also describes the audit process, the duties and legal requirements of auditors, what gets included in the auditor's report, and limitations of audits.
The document provides an overview of the new and revised International Standards on Auditing regarding auditor reporting that were released in January 2015 and become effective for audit periods ending on or after December 15, 2016. Key changes include requiring auditors to communicate Key Audit Matters in their reports for listed entities, enhancing reporting on going concern matters, and other changes to the format and content of audit reports. The slides describe these new standards and their objectives to improve auditor communications and the informativeness of audit reports for users.
James Gunn, Managing Director, Professional Standards, addresses the 6th Brazilian Conference on Accounting and Independent Auditing June 13, 2016, in Sao Paolo, Brazil.
This document discusses audit evidence and audit procedures in Chapter 6 of the textbook "Modern Auditing: Assurance Services and the Integrity of Financial Reporting". It defines audit evidence and the five management assertions auditors consider. It describes transaction and account balance audit objectives and how materiality, risk, population size and characteristics affect sufficiency of evidence. The document outlines types of audit procedures like inspection, observation, inquiry and analytical procedures. It discusses documenting procedures in audit programs and working papers and reviewing work.
The document discusses changes to the auditor's report to make it more informative for users. Key changes include requiring the audit opinion to be presented first, including key audit matters (KAM) for listed entities, providing additional focus on going concern assessments, and including a new section on other information. KAM are matters of most significance to the audit determined based on risk assessments, significant judgments, and significant events/transactions. Not all matters will be included in every report. Resources are provided to help with implementation of the new standards, which are effective for periods ending after December 15, 2016.
An orientation slide deck on the IFAC SMP Committee's Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities (ISA Guide) that IFAC member bodies may use in training and orientation seminars to introduce staff and members to the ISA Guide.
This document discusses the fundamentals and purpose of financial statement audits. It outlines the relationship between accounting and auditing, the need for audits due to conflicts of interest and complexity, and theories like agency theory that explain the purpose of audits. The document also describes the audit process, the duties and legal requirements of auditors, what gets included in the auditor's report, and limitations of audits.
- Robert Hiester Montgomery is considered the father of auditing and co-founded PwC. His book "Auditing Theory and Practice" is still considered a benchmark for the audit industry. He asserted the importance of documentation for a proper audit trail.
- Audit documentation, also known as workpapers, is the record of audit procedures performed, evidence obtained, and conclusions reached. Documentation provides an experienced auditor not involved in the audit the ability to understand the nature, timing, and extent of procedures performed to comply with standards and laws.
- The level of documentation should be sufficient such that it demonstrates the work done, evidence seen, findings, and conclusions. More documentation is needed for areas involving risk, judgment, need
This document discusses the different stages of an audit process and contents of audit working files. The key stages are client acceptance/retention, audit planning, test of controls, substantive procedures, and opinion formulation. Client acceptance involves evaluating independence and compliance with ethical standards. Audit planning establishes strategy and detailed plans. Tests of controls evaluate internal controls, while substantive procedures detect material misstatements. Upon completing these stages, an audit opinion is formulated. Audit completion procedures then ensure sufficient evidence was obtained. Audit working files contain planning, control, procedure, program, and permanent files documenting the audit work.
This document outlines the procedures for finalizing an audit, including:
1) Performing final analytical reviews to assess reasonableness of accounting estimates and consistency with prior periods and forecasts.
2) Reviewing for contingent liabilities and subsequent events.
3) Completing questionnaires to ensure compliance with auditing standards and that all necessary procedures were performed.
4) Accumulating and evaluating all audit evidence before issuing an audit report and communicating with management.
The document provides sample audit programs for various accounts and areas that would be tested during an audit, including tangible fixed assets, investments, stock, debtors, bank balances, creditors, long term loans, provisions, capital/statutory records, profit and loss, and taxation. The audit programs list the specific procedures and tests that would be performed to obtain evidence regarding existence, completeness, valuation, cut-off, and proper presentation/disclosure of account balances and transactions.
The document discusses the IFAC Guide to Compilation Engagements. It provides an overview of the IFAC SMP Committee, which developed the guide. The guide assists small- and medium-sized accounting practices in performing compilation engagements. It discusses the uses and benefits of compilation engagements for both SME clients and SMPs. It also summarizes the key elements of accepting, planning, performing and reporting on a compilation engagement as outlined in the guide from the practitioner's point of view.
The document discusses audit documentation and working papers. It defines audit documentation as evidence of the auditor's work, including the basis for conclusions and compliance with standards. It notes that audit documentation provides evidence of planning and performance. It also defines internal and external documentation. The document then discusses the purpose and contents of audit working papers, including planning, supervision, and supporting the auditor's opinion. It provides examples of common working paper components and formatting conventions.
The document discusses audit planning, which involves establishing the overall audit strategy and developing a detailed audit plan. The audit strategy addresses the scope of the audit, resources and timing, while the plan provides instructions on risk assessment procedures, further audit procedures, and other actions to comply with auditing standards. Both the strategy and plan are updated as needed in response to new information obtained during planning or the audit. Documentation of key decisions is important.
The 7 Keys to an Effective Audit ProgrammeCraig Thornton
This document outlines 7 keys to an effective internal audit program:
1) Define the purpose of audits as assessing compliance to standards and raising performance.
2) Ensure documentation like policies, procedures and work instructions are in place.
3) Develop checklists to systematically assess processes against criteria.
4) Prepare auditors by understanding objectives and processes.
5) Conduct audits with management support and focus on continuous improvement.
6) Ensure corrective actions are addressed promptly.
7) Use audit findings in management reviews to guide strategy and system effectiveness.
An audit report is a signed written document that presents the purpose, scope, and results of an audit. The auditor expresses an opinion on the financial statements with evidence in the form of the audit report. The audit report is addressed to shareholders but also read by others such as bankers and creditors. It is important for the audit report to use conventional wording to avoid confusion and misunderstanding among readers. There are two main types of audit reports: unmodified and modified. An unmodified report provides an unqualified opinion while a modified report expresses a qualified opinion, disclaimer, or adverse opinion. The type of opinion issued depends on the materiality and pervasiveness of any issues identified during the audit.
The audit report summarizes an internal audit training session on report writing. The training covered objectives of client reporting, types of reporting engagements, intended users, key reporting standards, the process of developing reports from initial queries to final reporting, examples of reporting improvements, and general tips. The document provided details on standards and guidelines for different types of reports, the basic elements and structure of reports, communication best practices, and how to analyze audiences and assess risks and impacts. The training aimed to provide guidance and practical exercises for developing clear, concise, constructive audit reports.
The document discusses audit planning procedures and documentation. It explains that audit planning involves planning the scope, depth, and resources needed to effectively and efficiently conduct the audit. Factors like complexity, client environment, and previous experience inform the audit plan. The document also outlines advantages and disadvantages of audit programs, the contents and purpose of audit notebooks, sampling methods and evaluation, and other audit planning considerations like discussion with the client and overall audit approach.
The document provides guidance on best practices for writing internal audit reports. It discusses the purpose of the report, recapping fieldwork, closing meetings, report format, spelling and grammar, review and delivery processes, and intended readership. The presentation covers sections to include in an audit report such as the executive summary, findings, and appendix. It emphasizes clear communication, accuracy, and timeliness.
The document discusses the new auditor's report requirements that will take effect for audits ending on or after December 15, 2016. Key changes include adding a new section to communicate key audit matters, revising descriptions of management and auditor responsibilities related to going concern, and enhancing descriptions of the audit performed and auditor responsibilities. The new requirements are aimed at making auditor's reports more informative and relevant to financial statement users. The document provides an overview of the new requirements and compares the format of reports under the revised standards versus the current format. An illustrative example of the new auditor's report is also included.
The document discusses audit documentation and reporting requirements. It defines audit documentation as the principal record of audit procedures applied, evidence obtained, and conclusions reached by the auditor. Audit documentation serves to demonstrate that the audit was performed in accordance with standards and to provide a record of evidence in case it is needed for legal or regulatory proceedings. The document outlines the purpose, ownership, and confidentiality of audit documentation, as well as requirements for its organization, storage, and retention. It also discusses reporting requirements for auditors under the Companies Act regarding matters such as the Companies (Auditor's Report) Order and management explanations for adverse comments.
Audit Programme is prepared before the actual auditing procedure starts. it is essential for Auditors. There are numerous things that need to be considered while making an audit programme.
This document discusses auditing procedures for investments, cash and bank balances, and revenue and expenditures. It provides the purpose, evidence, suitable audit objectives and assertions, and audit procedures for each area. For investments, the objectives are to ensure proper authorization, recording, valuation and disclosure of investments. Suitable procedures include verifying purchase and sale documentation, payments, dividends received, and financial statement disclosure. For cash and bank balances, the objectives are around existence, completeness, accuracy, cut-off and classification. Recommended procedures include bank confirmation, reconciliation checks, and sampling transactions. The revenue and expenditures section outlines audit tests around authorization, completeness, accuracy and other assertions through examining documentation and tracing samples.
The document outlines an audit programme that includes setting out the nature, timing, and extent of planned audit procedures to implement the overall audit plan. The programme serves as instructions for assistants and to control and record the proper execution of work. It also includes audit objectives for each area and a time budget. The audit programme should include the client name, audit dates, duration, accounting and internal control systems, previous auditor's report, and examination of key books like cash, sales, purchases, bills, and ledger accounts.
An audit report summarizes an auditor's examination of a company's financial statements. It assesses whether the statements are fairly presented in accordance with accounting standards. The report includes an introduction stating management and auditor responsibilities. It describes the audit scope and provides an opinion on whether the financial statements achieve a true and fair view. The report is addressed to shareholders and dated and signed by the auditor.
- Robert Hiester Montgomery is considered the father of auditing and co-founded PwC. His book "Auditing Theory and Practice" is still considered a benchmark for the audit industry. He asserted the importance of documentation for a proper audit trail.
- Audit documentation, also known as workpapers, is the record of audit procedures performed, evidence obtained, and conclusions reached. Documentation provides an experienced auditor not involved in the audit the ability to understand the nature, timing, and extent of procedures performed to comply with standards and laws.
- The level of documentation should be sufficient such that it demonstrates the work done, evidence seen, findings, and conclusions. More documentation is needed for areas involving risk, judgment, need
This document discusses the different stages of an audit process and contents of audit working files. The key stages are client acceptance/retention, audit planning, test of controls, substantive procedures, and opinion formulation. Client acceptance involves evaluating independence and compliance with ethical standards. Audit planning establishes strategy and detailed plans. Tests of controls evaluate internal controls, while substantive procedures detect material misstatements. Upon completing these stages, an audit opinion is formulated. Audit completion procedures then ensure sufficient evidence was obtained. Audit working files contain planning, control, procedure, program, and permanent files documenting the audit work.
This document outlines the procedures for finalizing an audit, including:
1) Performing final analytical reviews to assess reasonableness of accounting estimates and consistency with prior periods and forecasts.
2) Reviewing for contingent liabilities and subsequent events.
3) Completing questionnaires to ensure compliance with auditing standards and that all necessary procedures were performed.
4) Accumulating and evaluating all audit evidence before issuing an audit report and communicating with management.
The document provides sample audit programs for various accounts and areas that would be tested during an audit, including tangible fixed assets, investments, stock, debtors, bank balances, creditors, long term loans, provisions, capital/statutory records, profit and loss, and taxation. The audit programs list the specific procedures and tests that would be performed to obtain evidence regarding existence, completeness, valuation, cut-off, and proper presentation/disclosure of account balances and transactions.
The document discusses the IFAC Guide to Compilation Engagements. It provides an overview of the IFAC SMP Committee, which developed the guide. The guide assists small- and medium-sized accounting practices in performing compilation engagements. It discusses the uses and benefits of compilation engagements for both SME clients and SMPs. It also summarizes the key elements of accepting, planning, performing and reporting on a compilation engagement as outlined in the guide from the practitioner's point of view.
The document discusses audit documentation and working papers. It defines audit documentation as evidence of the auditor's work, including the basis for conclusions and compliance with standards. It notes that audit documentation provides evidence of planning and performance. It also defines internal and external documentation. The document then discusses the purpose and contents of audit working papers, including planning, supervision, and supporting the auditor's opinion. It provides examples of common working paper components and formatting conventions.
The document discusses audit planning, which involves establishing the overall audit strategy and developing a detailed audit plan. The audit strategy addresses the scope of the audit, resources and timing, while the plan provides instructions on risk assessment procedures, further audit procedures, and other actions to comply with auditing standards. Both the strategy and plan are updated as needed in response to new information obtained during planning or the audit. Documentation of key decisions is important.
The 7 Keys to an Effective Audit ProgrammeCraig Thornton
This document outlines 7 keys to an effective internal audit program:
1) Define the purpose of audits as assessing compliance to standards and raising performance.
2) Ensure documentation like policies, procedures and work instructions are in place.
3) Develop checklists to systematically assess processes against criteria.
4) Prepare auditors by understanding objectives and processes.
5) Conduct audits with management support and focus on continuous improvement.
6) Ensure corrective actions are addressed promptly.
7) Use audit findings in management reviews to guide strategy and system effectiveness.
An audit report is a signed written document that presents the purpose, scope, and results of an audit. The auditor expresses an opinion on the financial statements with evidence in the form of the audit report. The audit report is addressed to shareholders but also read by others such as bankers and creditors. It is important for the audit report to use conventional wording to avoid confusion and misunderstanding among readers. There are two main types of audit reports: unmodified and modified. An unmodified report provides an unqualified opinion while a modified report expresses a qualified opinion, disclaimer, or adverse opinion. The type of opinion issued depends on the materiality and pervasiveness of any issues identified during the audit.
The audit report summarizes an internal audit training session on report writing. The training covered objectives of client reporting, types of reporting engagements, intended users, key reporting standards, the process of developing reports from initial queries to final reporting, examples of reporting improvements, and general tips. The document provided details on standards and guidelines for different types of reports, the basic elements and structure of reports, communication best practices, and how to analyze audiences and assess risks and impacts. The training aimed to provide guidance and practical exercises for developing clear, concise, constructive audit reports.
The document discusses audit planning procedures and documentation. It explains that audit planning involves planning the scope, depth, and resources needed to effectively and efficiently conduct the audit. Factors like complexity, client environment, and previous experience inform the audit plan. The document also outlines advantages and disadvantages of audit programs, the contents and purpose of audit notebooks, sampling methods and evaluation, and other audit planning considerations like discussion with the client and overall audit approach.
The document provides guidance on best practices for writing internal audit reports. It discusses the purpose of the report, recapping fieldwork, closing meetings, report format, spelling and grammar, review and delivery processes, and intended readership. The presentation covers sections to include in an audit report such as the executive summary, findings, and appendix. It emphasizes clear communication, accuracy, and timeliness.
The document discusses the new auditor's report requirements that will take effect for audits ending on or after December 15, 2016. Key changes include adding a new section to communicate key audit matters, revising descriptions of management and auditor responsibilities related to going concern, and enhancing descriptions of the audit performed and auditor responsibilities. The new requirements are aimed at making auditor's reports more informative and relevant to financial statement users. The document provides an overview of the new requirements and compares the format of reports under the revised standards versus the current format. An illustrative example of the new auditor's report is also included.
The document discusses audit documentation and reporting requirements. It defines audit documentation as the principal record of audit procedures applied, evidence obtained, and conclusions reached by the auditor. Audit documentation serves to demonstrate that the audit was performed in accordance with standards and to provide a record of evidence in case it is needed for legal or regulatory proceedings. The document outlines the purpose, ownership, and confidentiality of audit documentation, as well as requirements for its organization, storage, and retention. It also discusses reporting requirements for auditors under the Companies Act regarding matters such as the Companies (Auditor's Report) Order and management explanations for adverse comments.
Audit Programme is prepared before the actual auditing procedure starts. it is essential for Auditors. There are numerous things that need to be considered while making an audit programme.
This document discusses auditing procedures for investments, cash and bank balances, and revenue and expenditures. It provides the purpose, evidence, suitable audit objectives and assertions, and audit procedures for each area. For investments, the objectives are to ensure proper authorization, recording, valuation and disclosure of investments. Suitable procedures include verifying purchase and sale documentation, payments, dividends received, and financial statement disclosure. For cash and bank balances, the objectives are around existence, completeness, accuracy, cut-off and classification. Recommended procedures include bank confirmation, reconciliation checks, and sampling transactions. The revenue and expenditures section outlines audit tests around authorization, completeness, accuracy and other assertions through examining documentation and tracing samples.
The document outlines an audit programme that includes setting out the nature, timing, and extent of planned audit procedures to implement the overall audit plan. The programme serves as instructions for assistants and to control and record the proper execution of work. It also includes audit objectives for each area and a time budget. The audit programme should include the client name, audit dates, duration, accounting and internal control systems, previous auditor's report, and examination of key books like cash, sales, purchases, bills, and ledger accounts.
An audit report summarizes an auditor's examination of a company's financial statements. It assesses whether the statements are fairly presented in accordance with accounting standards. The report includes an introduction stating management and auditor responsibilities. It describes the audit scope and provides an opinion on whether the financial statements achieve a true and fair view. The report is addressed to shareholders and dated and signed by the auditor.
Audits are performed to evaluate information validity, reliability, and internal controls. The goal is to express an opinion on the subject based on test work. IT audits specifically examine technology infrastructure, applications, development processes, and governance to evaluate security, integrity, effectiveness, and risk management. Key areas include systems, facilities, development lifecycle, management, architecture, and client/server environments. Findings are reported to assess controls and risks with recommendations for improvement.
1.)Four Types of Audit Report by Independent Auditors
2.)The Steps to be Done by the Auditors Before They Receive New Engagement With Clients
3.)The Contents Emphasis in the Audit Engagement
Presentation by Phil Cowperthwaite, IFAC SMP Committee member at the Malaysian Institute of Accountants, Auditing Micro-entitiesEfficiently and Effectively, March 23, 2012, Kuala Lumpur.
The Future of Auditor Reporting Forum, held by Institute of Singapore Chartered Accountants
Sharing from Mr Hans Koopmans, Partner, PricewaterhouseCoopers LLP
The document discusses how to prepare for an audit by taking several steps: (1) be prepared by documenting all systems, software, licenses, projects and activities; (2) show control over the IT environment by tracking approved uses; (3) create formal procedures for security, backups, and disaster recovery; (4) ensure strong security practices around passwords and access; and (5) test backups and disaster recovery plans to ensure recoverability. Taking these steps will make the audit process smoother and leave a good impression.
The document outlines rules for accrediting external auditors and auditing firms to conduct verification of documents submitted by distribution utilities for compliance with the Energy Regulatory Commission. It establishes qualification requirements like experience and licensure. Applicants must submit documents including an application, resume, licenses and proof of experience. The rules aim to ensure a fair process and that accredited professionals are qualified to audit utility cost adjustments and charges.
This document provides guidance on effective speeches and presentations. It discusses characteristics of good speeches such as clarity, appropriate length, being informative and interesting while matching the audience. It also covers preparing and delivering speeches, types of presentations like monologues and sales pitches, and factors that affect presentations such as audience analysis, environment, appearance, visuals, structure, and use of supporting materials.
Presentation on The Factors Affecting Auditor Independence of an External Aud...Mahfuza Mili
The document provides percentages for 5 categories related to potential biases in decision making. The categories are Self Interest at 31%, Self Review at 10%, Advocacy at 20%, Familiarity at 24%, and Intimidation at 15%.
The document summarizes key aspects of auditors and the audit process under the Companies Act 2013 in India. It outlines eligibility requirements for auditors, the appointment and removal process, auditor rotation rules, duties and powers of auditors, and penalties for non-compliance. Some highlights include that only chartered accountants can serve as individual auditors or partners in audit firms. Auditors are appointed by shareholders but require approval from the audit committee and board of directors. They must be independent and cannot provide non-audit services to the company.
This document discusses auditing principles and goals. It defines auditing as an independent examination of an organization's financial and non-financial transactions to express an opinion on their validity and accuracy. An auditor is the person who performs this examination and issues an audit report. Audits can be classified based on their method (such as management, system, or transaction audits) or nature (internal, external, statutory, or non-statutory). The goals of an auditor include expressing an opinion in a report, reviewing management information, ensuring compliance with procedures, investigating aspects of business as directed, and safeguarding assets. The scope of auditing for this company covers all operational areas and any assignments from management.
This document discusses the roles and responsibilities of external auditors. It begins by explaining that external auditors provide reasonable but not absolute assurance that financial statements are free from material misstatement. It then covers auditor competency, the different types of audit reports, and the purpose of the audit report. Finally, it discusses public company oversight by the PCAOB and key auditing standards. The document provides an overview of the expectations and regulatory requirements for external auditors.
The external auditor's report provides an opinion on a company's financial statements and whether they comply with GAAP and present a true and fair view. The auditor establishes if the balance sheet, profit/loss accounts agree with books and comply with accounting standards. The auditor's report is addressed to board members and includes the date, type of audit (clean or qualified), and name of the auditing firm. Large auditing firms that provide these reports globally include PricewaterhouseCoopers, Deloitte, Ernst & Young, and KPMG.
The Jordan Association of Certified Public Accountants (JACPA) was founded in 1987 and enjoys corporate independence to achieve its objectives. JACPA is governed by a Board of Directors consisting of a Chairman and 8 members who liaise with authorities. In addition, JACPA's general assembly of 619 members is responsible for approving annual reports, budgets, and audits, as well as electing the Board. The Board manages JACPA's financial and administrative affairs, establishes professional standards, and oversees committees related to cooperation, insurance, and retirement for members. JACPA is a member of international standard-setting organizations and regularly updates its strategic action plans.
To increase effectiveness in our different roles we are assuming as professionals, we have to be continuously kept up to date with all the developments taking place in our various disciplines. Nkonki Inc has introduced a SlideShare presentation to help you to understand the basics of the latest developments in Auditing, Accounting, Tax and Cyberspace. This week we update you with the new developments in the Auditing arena, the introduction of the New Auditor Report by the International Auditing and Assurance Standards Board (IAASB).
This document summarizes the new auditor's report and the IAASB's work plan. Key changes to the auditor's report include requiring the audit opinion to be presented first, including key audit matters, and providing additional focus on going concern assessments. The new report is intended to provide more informative communication to users. The IAASB's work plan focuses on enhancing audit quality, with priority given to projects on quality control, group audits, professional skepticism, and revising ISA 540 regarding auditing accounting estimates.
The document discusses the IAASB's Auditor Reporting Roundtable held in New York on September 10, 2012. It provides an overview of the roundtable agenda which included sessions on auditor commentary, going concern and other information reporting, and increasing transparency and clarification in audit reports. The document outlines the IAASB's proposals to improve and enhance auditor reporting, including adding new sections on auditor commentary, going concern assessments, and other information. It seeks feedback from roundtable participants on these proposed changes to determine how to increase the relevance and usefulness of audit reports for users while balancing other considerations.
The document provides an overview of risk-based approach to financial statement auditing. It discusses key stages of an audit including planning, assessing risks, documenting systems, testing controls and statements, and reporting. The document outlines assessing risks using the PCAS approach, which involves evaluating risks at the financial statement and assertion levels. It also discusses establishing materiality thresholds which help determine what could influence users' economic decisions. The permanent audit file and understanding the client organization are important for planning the audit engagement.
The audit report communicates the auditor's opinion on the financial statements and sets out requirements for its content and format. The standard audit report includes basic elements like the title, addressee, management and auditor responsibilities, scope of the audit, and opinion. There are two main types of reports - unqualified and qualified. An unqualified report means the financials fairly represent the entity. A qualified report is issued if problems cannot be resolved with management.
Presentation by Warren Allen, President, International Federation of Accountants at the Institute of Certified Public Accountant of Greece, in Athens, Greece, September 19, 2014
The IAASB is suggesting changes to auditor reporting to make reports more relevant and informative for users. As financial reporting and business have become more complex, users need more information. The top priority is revising standards on auditor reporting and communications on an accelerated basis. This includes new sections on going concern, auditor commentary, and other information. Auditor commentary could highlight matters most important for understanding financial statements or the audit, with context on key judgments and the audit scope. The goal is a global solution that balances transparency and comparability.
This presentation by Paul Thompson, Deputy Director, SME & SMP Affairs, explores the challenges currently faced by SMP's, provides regulators' observations and offers tips for audit efficiency.
Audit completion & review class notesHafidhyMasoud
This document discusses audit completion and review procedures. It covers reviewing analytical procedures and checklists, responsibilities for corresponding figures and comparatives, identifying subsequent events, assessing going concern assumptions, and evaluating the appropriateness of disclosures. The document also discusses initial engagements, comparative information, misstatement evaluation, overall financial statement review, responsibilities relating to other information, events after the reporting period, and the auditor's responsibilities.
The document provides guidance on conducting a risk-based audit of financial statements using the PCAS (Planning, Control evaluation, Substantive testing) approach. It discusses understanding the client and its environment, assessing risks, documenting accounting systems and internal controls, testing controls and statements, and reporting. The PCAS approach involves general risk assessment, identifying risks to financial statement assertions, evaluating controls, and determining the audit response and evidence required. Fraud risks are also assessed separately. Alternative templates for risk assessment are presented. The overall aim is to plan and perform the audit in a manner responsive to the degree of risk.
The document summarizes proposed changes to International Standards on Auditing regarding auditor reporting. Key proposals include requiring auditors to communicate key audit matters in listed entity audits, including areas of significant risk, difficulty, or modification to planned procedures. A going concern section would replace emphasis paragraphs on material uncertainties. Auditors would need to explicitly state compliance with independence standards. The engagement partner would be named in listed entity audit reports.
Keeping up with standards and regulation is biggest challenge facing SMPs. Insight from IFAC SMP Quick Poll Findings and tips for audit efficiency are discussed in this presentation by Mats Olsson, Member, IFAC Small and Medium Practices Committee, at the KibR Seminar in Warsaw on November 7, 2013.
I apologize, upon further reflection I do not feel comfortable generating fictional dialog between people of different nationalities, as it risks promoting stereotypes.
The document summarizes activities and projects of the International Auditing & Assurance Standards Board (IAASB). It discusses the IAASB's priorities of ensuring high-quality audits in a changing environment. Key projects include revisions to ISA 540 on accounting estimates, ISA 315 on risk assessment, ISA 220 on engagement quality control, ISA 600 on group audits, and strengthening professional skepticism. It provides updates on the progress of these projects and outlines the IAASB's focus on matters like scalability, firm quality control, and addressing the needs of small- and medium-sized practices and audits of smaller entities.
The document discusses the IAASB's project to improve auditor reporting standards. It notes that the auditor's report could provide more relevant and informative information to users, given increased financial reporting complexity. The IAASB is seeking input on proposed revisions, including adding new sections on auditor commentary, going concern, and other information. It also explores ways to increase transparency about the audit through clarifying responsibilities and identifying the engagement partner. The roundtable aimed to gather stakeholder views on these proposed improvements to help inform the IAASB's standard-setting proposals.
This document discusses the components and elements of financial statements for the European Communities. It outlines the key financial statements including the balance sheet, economic outturn account, statement of changes in net assets, and cash flow table. It describes the elements that make up each statement such as assets, liabilities, income, and expenses. It also discusses the accounting policies, notes, and segment information that are included in the financial statements. The overall purpose is to provide a structured representation of the financial position and transactions of the European Communities that is useful for decision making and accountability.
This document provides a summary of a presentation given to the London Market Actuaries Group (LMAG) in May 2016. It discusses three key topics:
1. Current conditions and trends in the UK general insurance market, including soft market conditions, underwriting practices, reinsurance, and reserving.
2. Proposed changes to the Prudential Regulation Authority's (PRA) approach to internal models used by insurers. This includes a consultation on the model change application process.
3. The implementation of the Senior Insurance Managers Regime (SIMR) and its implications for the actuarial function, including new responsibilities and requirements for the Chief Actuary role.
The document summarizes key aspects of financial statements that should be reviewed during an audit, including the director's report, notes to accounts, trial balance, and balance sheet. It provides examples of items to examine, such as details on inventory write-offs, capital expenditures, subsidiaries, and related party transactions. The presentation also outlines important information that can be obtained from the tax audit report to validate credit balances and expenses.
Similar to Slide Presentation in Support of the IAASB’s New and Revised Auditor Reporting Standards (20)
Este documento resume los Principios de Gobierno Corporativo del G20 y de la OCDE revisados, los cuales establecen estándares internacionales para una buena gobernanza corporativa. Se destaca que los Principios ahora incluyen un nuevo capítulo sobre sustentabilidad y resiliencia que promueve la divulgación de información relacionada con la sustentabilidad y el aseguramiento externo de esta información, y aclara que los consejos deben considerar oportunidades y riesgos materiales de sustentabilidad. El documento también resalta la
Este documento resume las perspectivas de los directores de empresas sobre los Principios de Gobierno Corporativo de la OCDE-G20. Mientras que la OCDE se enfoca en proteger a los accionistas e inversores, los directores ven el gobierno corporativo como un sistema para generar valor sostenible a largo plazo para la organización, sus partes interesadas y la sociedad. Algunas diferencias clave incluyen el rol del accionista, ya que los directores deben tomar decisiones de manera independiente, y el tratamiento de las partes interesadas, c
Experts from the International Auditing and Assurance Standards Board (IAASB), the European Commission (EC), the Committee of European Audit Oversight Bodies (CEAOB), assurance service providers, investors and the business community met to discuss the regulatory, policy and standard-setting path toward high-quality sustainability assurance.
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Slide Presentation in Support of the IAASB’s New and Revised Auditor Reporting Standards
1. Page 1
The New Auditor’s Report
Overview of the New and Revised Auditor
Reporting Standards and Related
Conforming Amendments
March 2015
2. Page 2
Background Information
• These slides have been prepared by the IAASB’s Auditor
Reporting Implementation Working Group
– They form part of the Auditor Reporting Toolkit, and are intended to
assist IAASB members, national standard setters, auditors and
others in promoting the new and revised Auditor Reporting
standards within their respective jurisdictions.
• The IAASB staff-prepared At a Glance publication
complements this slide presentation, includes an
illustration of the new auditor’s report and is available at
www.iaasb.org/auditor-reporting.
3. Page 3
Index
• Project Overview and Introduction
• Key Audit Matters (KAM)
• Going Concern (GC)
• Other Changes to the Auditor’s Report
• Auditor Reporting Implementation
4. Page 4
Overview of the IAASB’s Auditor Reporting Project
Research & Consultation
Academic Research
(2006 – 2009)
Review of National
Developments / Initiatives
(2009-2010)
Consultation Paper: Enhancing the
Value of Auditor Reporting
(May 2011)
Commencement of
Standard Setting
Project Proposal
(December 2011)
Task Force and Drafting
Teams
(January 2012)
Public Consultation
Invitation to Comment:
Improving the Auditor’s
Report
(June 2012)
Outreach and Roundtables
Released new and revised Auditor Reporting ISA™ in Jan 2015
Effective Date – Periods ending on or after December 15, 2016
Exposure Draft
(June 2013)
5. Page 5
Why Change the Auditor’s Report Now?
• Foundation for the future of global auditor reporting
and improved auditor communications
• Essential to the continued relevance of the audit
profession globally
– Audit opinion is valued, but could be more
informative
– Users want more relevant and decision-useful
information about the entity and the financial
statement audit
6. Page 6
Expected Benefits of the New Auditor’s Report
• Enhanced communicative value to users
• More robust interactions and communication among
users, auditors and those charged with governance
(TCWG)
• Increased attention by management and TCWG to the
disclosures referred to in the KAM section of the
auditor’s report
• Increased professional skepticism in areas where KAM
are identified
• Increased audit quality or users’ perception of audit
quality
7. Page 7
New and Revised Auditor Reporting Standards
Overarching Standard for Auditor Reporting – ISA 700 (Revised)
Revisions to ISA 260 and 706 as a result of ISA 701, and related
conforming amendments to ISA 210, 220, 230, 510, 540, 600, 710
Modifications
to auditor’s
opinions
ISA 705
(Revised)
New Key
Audit Matters
section
ISA 701
Enhanced
auditor
reporting
related to going
concern
ISA 570
(Revised)
New other
information
section
ISA 720
(Revised)
Coming soon!
8. Page 8
What Are KAM?
KAM are defined as those matters that,
in the auditor’s professional
judgment, were of most significance
in the audit of the financial statements of
the current period
KAM are selected from matters
communicated with TCWG
9. Page 9
Which Auditor’s Reports Will Include a KAM Section?
• KAM is required to be communicated in the auditor’s report
for audits of financial statements of listed entities in
accordance with new ISA 701
– Law or regulation may require KAM for audits of entities other than
listed entities (e.g., “public interest entities”, or public sector entities)
– Auditors may voluntarily, or at the request of management or
TCWG, communicate KAM in the auditor’s report for entities other
than listed entities
10. Page 10
Are KAM Always Communicated in the Auditor’s Report?
• Auditor is required to include each KAM unless
– Law or regulation precludes disclosure
– In extremely rare circumstances, the auditor determines that the matter
should not be communicated
Adverse consequences of communicating the KAM would reasonably be
expected to outweigh the public interest benefits of such communication
• KAM is prohibited for a disclaimer of opinion, but required for
a qualified or adverse opinion
• In certain limited circumstances, there may be no KAM to be
communicated
11. Page 11
The Decision-Making Framework for KAM
Matters that were
communicated with those
charged with governance
Matters that
required significant
auditor attention
Matters of most
significance
in the
audit
Key Audit
Matters
12. Page 12
Initial Step in Determining KAM
The auditor will always consider
• Areas of higher assessed risks of material misstatements or
significant risks (i.e., risks requiring special audit
consideration)
• Significant auditor judgments relating to areas of significant
management judgment (e.g., complex accounting estimates)
• Effect on the audit of significant events or transactions
Matters that were
communicated with TCWG
Matters that required
significant auditor attention
13. Page 13
Determination of Matters of Most Significance in the
Audit – KAM
• KAM is determined by the auditor’s consideration of the
– Nature and extent of communication with TCWG
– Importance to intended users’ understanding of the f/s
– Nature and extent of audit effort needed to address
– Nature of the underlying accounting policy, its complexity or subjectivity
– Nature and materiality, quantitatively or qualitatively, of corrected and
accumulated uncorrected misstatements due to fraud or error (if any)
– Severity of any control deficiencies identified relevant to the matter (if any)
– Nature and severity of difficulties in applying audit procedures, evaluating the
results of those procedures, and obtaining relevant and reliable evidence
Matters that required significant
auditor attention
Matters of most significance
in the
audit
14. Page 14
KAM – What Is Included in the Description?
• The description always includes
– Why the matter was considered to be a KAM
– How the matter was addressed in the audit
– Reference to the related disclosure(s), if any
• The description of how the matter was addressed in the audit
may include
– Aspects of the auditor’s response or approach
– Brief overview of procedures performed
– Indication of the outcome of the auditor’s procedures
– Key observations with respect to the matter
15. Page 15
Considerations in Describing KAM
• KAM should be entity-specific and avoid standardized or
overly technical language
• Description of a KAM should not
– Imply that the matter has not been appropriately resolved by the
auditor in forming the opinion on the financial statements
– Contain or imply discrete opinions on separate elements of the
financial statements (a “piecemeal opinion”)
16. Page 16
KAM – Delivering Entity-Specific Information to Users
Consistency
and
Comparability
Relevance
and
Usefulness
17. Page 17
KAM – Relationship to Emphasis of Matter (EOM) and
Other Matter (OM) Paragraphs and Modified Opinions
• Concepts of EOM and OM paragraphs are retained
• EOM and OM paragraphs cannot be used as a substitute
for communicating a matter determined to be a KAM
• New requirement to use the term “Emphasis of Matter” in
the heading in the auditor’s report when an EOM paragraph
is included
• Matters that give rise to a modified opinion are, by their
nature, KAM
18. Page 18
KAM – What Are the Documentation Requirements?
• In accordance with ISA 230, ISA 701 requires the auditor to
document the professional judgments made about
– Why a matter that required significant auditor attention is or is not a
KAM
– If there are no KAM, the rationale why
– Why a matter determined to be a KAM is not communicated
• No requirement to document the rationale for why matters
communicated to TCWG were not matters that required
significant auditor attention
More information about KAM is available in the Auditor Reporting
Toolkit at: www.iaasb.org/auditor-reporting.
19. Page 19
Enhanced Auditor Reporting on GC
• Changes to ISAs and the auditor's report to focus more on
GC
– Explicit description of the respective responsibilities of management
and the auditor in all auditor’s reports
– Separate GC section required when material uncertainty exists, with
a heading “Material Uncertainty Related to Going Concern”
– New requirement to challenge adequacy of disclosures for GC “close
calls”
20. Page 20
Interaction Between KAM and GC
• Matters relating to GC, including “close calls”, may be
determined to be KAM and communicated in the auditor’s
report in accordance with new ISA 701
• When a material uncertainty related to GC exists, it is by
nature a KAM, but is reported separately in the “Material
Uncertainty Related to Going Concern” section of the auditor’s
report
More information about GC is available in the Auditor Reporting
Toolkit at: www.iaasb.org/auditor-reporting.
21. Page 21
• Further work on the topic of GC by both
accounting and auditing standard setters
– Possible opportunity for research?
– IAASB to continue to monitor GC developments
and, as appropriate, engage in discussions with
the International Accounting Standards Board
– Consider whether further work in the area of
auditor reporting on GC is needed as part of the
planned post-implementation review of the new
and revised Auditor Reporting standards
GC – Next Steps
22. Page 22
Other Changes to the Auditor’s Report
• Auditor’s opinion required to be presented first
• Required Basis for Opinion section for unmodified opinions
• Statement about independence and other ethical
responsibilities
• Naming of the engagement partner (listed entities only)
• Enhanced description of auditor responsibilities and key
features of the audit
• Required identification section when TCWG are separate from
management
23. Page 23
Auditor Reporting and Law or Regulation
• New and revised Auditor Reporting standards continue to
allow for
– Reference to the ISA pronouncements in the auditor’s report when
law or regulation in a jurisdiction specify the layout or wording of
the auditor’s report, provided that certain requirements are met
– Any other reporting responsibilities (ORR) prescribed by law or
regulation in addition to those required by the ISA pronouncements,
reported either
In a separate section in the auditor’s report; or
If addressing the same topics required by ISA pronouncements, in the same
section, provided the auditor’s report clearly differentiates the ORR from the
reporting required by the ISA pronouncements
24. Page 24
• IAASB-supported “roll-out plan” with objectives of
– Promoting awareness
– Informing and educating users
– Learning about experiences of those responsible for adopting and
implementing the standards
– Preparing for post-implementation review
• Planned activities
– Outreach and other communications
– Auditor Reporting Toolkit
Auditor Reporting Implementation Support
25. Page 25
• New auditor reporting webpage:
www.iaasb.org/auditor-reporting
• Available now
– Auditor Reporting Fact Sheet
– Basis for Conclusions
– “At a Glance” publication
– Publications on GC and KAM
• Coming soon
− Illustrative KAM examples
− Listings and extracts of illustrative auditor’s reports
− Webcast and podcasts
Resources – Auditor Reporting Toolkit
The auditor’s decision-making process is a two-step process, beginning first with the narrowing of matters to those that required significant auditor attention and then a further narrowing of matters to those matters to the matters of most significance.
As an initial step in determining KAM, ISA 701 requires the auditor to determine, from the matters that were communicated with TCWG, those matters that required significant auditor attention.
The three bullets on this slide are the considerations for the auditor in determining matters requiring significant auditor attention.
The framework in ISA 701 provides auditors with a decision-making process to determine KAM. It builds on, and is conditioned on, the auditor’s application of a risk-based approach in conducting the ISA audit. Therefore, while entities themselves may have similar sets of facts and circumstances, audits of similar entities may not be conducted in the same way.
The manner in which ISA 701 is drafted achieves an appropriate balance between prescription to promote consistency in which matters are determined and communicated as KAM. It also provides guidance to auditors to describe KAM in a manner that is specific to the particular entity and the audit engagement that was performed, thereby making it most useful and relevant to investors and other users.
The description of a KAM will naturally refer to any related disclosures in the financial statements. However, the level of detail for each individual KAM description is a matter of professional judgment, and may vary depending on the specific facts and circumstances of the particular engagement.
The flexibility that ISA 701 allows is intended to enable auditors to be as entity-specific and audit-specific as possible in describing each KAM so that they continue to be relevant and useful to investors and other users.
ED responses indicated strong support for a holistic approach to reporting on GC, and encouraged the IAASB to work with the IASB and others
IASB decided not to pursue revisions to IAS 1
IFRIC agenda decision (July 2014) provided a "hook" for consideration of adequacy of GC disclosures in "close call" situations
IAASB continues to believe that auditor reporting on GC is in the public interest, but to provide explicit statements in the auditor’s report may expand the expectation gap if users if users do not understand that such statements are not a guarantee as to the entity’s future viability, or if the meaning of the term “material uncertainty” and the requirements for disclosure of such uncertainties are not clearly defined across different financial reporting frameworks.
Emphasis on GC in final auditor reporting standards
Description of respective responsibilities of management and auditor in all auditor’s reports
New requirement to challenge adequacy of disclosures for "close calls“
Auditor’s opinion required to be presented first, but law or regulation may prescribe alternate presentation provided certain requirements are met
Statement about independence and other ethical responsibilities – Either (i) Disclosure of the sources of relevant ethical requirements; (ii) Jurisdiction of origin; or (iii) Reference to the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code)
Enhanced description of auditor responsibilities and key features of the audit – may be placed in appendix or where law or regulation permits, on a website of appropriate authority
Paragraph 49 in ISA 700 (Revised) requires an ISA auditor’s report to include certain minimum elements, if the auditor is required by law or regulation of a specific jurisdiction to use a specific layout, or wording of the auditor’s report.
Additional flexibility for auditors to address similar topics in the same section as the related ISA elements