The stages of auditing are as follows: determine audit approach, understand the entity, assess risk of material misstatement, select audit procedures, prepare report, and report to management. Auditors determine risks, formulate responses like additional procedures, and test controls and substantive procedures. Audit risk is the risk of giving an inappropriate opinion and comes from inherent, control, and detection risk. Business risk impacts the organization directly from operations.

2. Determine the flow of documents and extent of controls

3. Prepare comprehensive record for evaluation of the systems.

5. Prepare and send a report to management identifying weakness and recommending improvement.

7. Report to member is the end product which auditors express their opinion of the accounts.

9. To review internal financial control

10. To review internal control and risk management systems

11. To monitor and review the effectiveness of internal audit

12. To make recommendation on the appointment of external auditors

13. To approve the remuneration and terms of engagement of external auditors

14. To review and monitor the independence and objectivity of the external auditors and the effectiveness of the audit process.

15. To develop and implement policy on the engagement of the external auditor to supply non-audit services.

17. Discussing among the engagement team

19. Management’s assessment of risk

20. Management’s identifying and responding to risk

21. Management’s communication to governances and employee

22. Question management if they aware of any actual, suspected or alleged fraud

23. If there are internal auditors, external auditors should ask them if they aware of actual, suspected, or alleged fraud, obtain their view about risk of fraud, and procedures performed

24. Make enquiries to other operating personnel not involving in governance.

25. Obtain an understanding of how those governance oversights the processes of identifying and responding to fraud & internal control in place.

26. Make inquiries to governance if they aware of the actual, suspected, or alleged fraud.

27. Consider unusual or unexpected relationships

28. Consider if other information obtained risks

30. Detect fraud by being mindful when carry out work

32. Provide auditors with access to all documents

34. use general accept auditing techniques

35. investigate if any suspicious

36. act honestly and carefully when making judgment

37. Duty to carry out the work required with Reasonable expediency (方便)

39. Fit (competence and capacity) and proper (character and suitability) persons

40. Works is conducted Properly with professional integrity

41. Technical standards (eg. ISAs)

42. Maintain an appropriate level of Competence (CPD)

44. Investigation of complaints against members

45. Compulsory professional indemnity (损害赔偿) insurance In each visit of the regulatory body to monitor the auditors should be as following:

46. Proper structure of audit approach

47. Carefully instituted quality control procedures

48. Ethical guidelines

49. Technical excellence

50. Fit and proper criteria

51. Peer review (audit files are review by another partner in audit firm)

52. Hot review is carried out before report is signed by peer.

53. Cold review is carried out after report is signed by independence person

55. Sufficiently documented

56. Issues resolved and reflected in audit conclusion

57. Objectives were achieved

59. Essential procedures

62. Objectivity: unbiased, conflict of interest, undue influence of the others or business judgment.

63. Professional Competence and due care: maintain professional knowledge on current development in practice, legislation, and techniques, act diligently or thoroughly and in accordance with standard.

64. Confidentiality: respect the confidentiality of information, not disclosed information to third parties.

66. Self-review eg. Review by the same person

67. Advocacy

68. Familiarity eg. long association, acceptance of gift

70. Valuation services

71. Taxation services

72. Internal audit services

73. Corporate finance services

74. IT services

75. Temporary staff cover

77. Public duty

78. Legal or professional right or duty

80. Engagement economic

81. Risk

82. Relationship

84. Auditors’ responsibilities

85. Management’s responsibilities

86. Finance reporting framework management adopted

87. Form of any report to be issued by auditors

88. Inherent limitation of an audit that some material misstatement may remain undiscovered

90. Revise or special term of engagement

91. Change of senior management

92. Significant change in the nature or size in client business

93. Legal requirements

94. Change in the financial reporting framework

96. Relationship with recent developments

97. Degree of subjectivity in financial information

98. Unusual transaction

99. Management intervention

100. Complex accounting principles or calculation

101. Manual intervention

102. Opportunity for control procedures not to be allowed

103. Significant transaction with a related party

105. Emphasizing to audit staff to maintain professional skepticism

106. Assigning additional or more experienced staff to the audit team

107. Using experts

108. Providing more supervision

109. Incorporating more unpredictability into the audit procedures

110. Detailed further audit procedure

111. Tests of controls to obtain sufficient and appropriateness audit evidence

112. Reperformance and inspection are useful procedure

113. Substantive procedures (on material items)

114. Analytical procedures

115. Large volumes of predictable transactions

116. Other procedures (tests of detail)

117. Class of transactions, account balance and disclosure

118. Agreeing FS to the underlying accounting records

119. Examining material journal entries

120. Examining other adjustments made in preparing the financial statements

122. Assess the risks of material misstatements

124. Limitation of accounting system and internal control (accounting record may not full of detail and accounting system may be operated by person who do not full understand of system)

125. There is collusion which directors and staffs do not tell the true

126. Audit evidence just indicate a probable not a certain.

128. Materiality

129. Past experience

133. Errors mean breach the statutory requirements

134. Critical point errors (loss in profit)

138. Actuarial calculation of liabilities associated with insurance contracts or employee benefit plan, environment liabilities, clean-up costs, contracts, laws and regulations

140. Discussion with that expert

141. Discussion with other auditors expert familiar with

142. Knowledge of qualifications, membership of professional body or industry association, license to practice, or other form of external recognition

143. Published papers or book written by that expert

145. The roles and responsibilities of auditor and expert

146. The nature, timing and extent of communication between auditors and expert

148. Assumption and method used

149. When work is carried out

150. The reason for any changes in assumption and method

152. Examine the financial & operational information

153. Review of economy, effectiveness, and efficiency

154. Review of compliance with laws and regulations

156. Technical competence – technical training

157. Professional due care – properly planned, supervised, reviewed and documented

159. Auditing through computer: examine the detail processing routine of control in the system if adequate, and this should use Computer Assisted Audit Technique (CAAT)

161. Comparison programs – compare program’s version

162. Interactive software – online system’s information

166. Controls are less effective than they actually are or test of details that a material error exists when it does not – this is risk of Audit efficiency.

168. They provide as reference for audit problems encountered.

169. They are invaluable in the event of litigation against them by either the client or some third party.

170. They are not only assisting in the control of current audit but well for planning and control of future audit.

172. The results of the audit procedures performed, and the audit evidence obtained;

174. It will be neater and easier to review

175. Save time, computer will summarize the key analytical information

176. Standard form can be called up on the screen

178. They promptly recorded at the correct amount, correct account, and proper accounting period.

179. Access to assets is proper authorized

180. Recorded assets are compared with the existing assets.