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    PPT_4[1]

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    PPT_4[1]

    Uploaded by

    jcj220017857
    3 views14 pages

    Copyright

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    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    3 views14 pages

    PPT_4[1]

    Uploaded by

    jcj220017857

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    You are on page 1of 14

    Advanced

    Auditing
    Quick Recap
    ֎ Laws and Regulations
    ֎ Responsibilities of Management
    ֎ Responsibilities of the Auditor
    ֎ Audit Procedures for Non Compliance
    ֎ Investigations of possible non compliance
    ֎ Reporting Non Compliance
    ֎ NOCLAR – Audit Responsibilities
    Quality Management

    ♣ Policies and procedures should be established which address:


    ♣ Leadership responsibilities for quality within the firm
    ♣ Relevant ethical requirements
    ♣ Acceptance and continuance of client relationships
    and specific engagements
    ♣ Human resources
    ♣ Engagement performance Monitoring.
    (i) Leadership

    ♣ The engagement partner takes responsibility for the overall


    quality of the engagement.
    ♣ The engagement partner should emphasize the importance of:
    ♣ Performing work that complies with professional
    standards.
    ♣ Complying with the firm’s quality control policies and
    procedures.
    ♣ Issuing auditor’s reports that are appropriate in the
    circumstances.
    ♣
    (ii) Acceptance and continuance
    of client relationships

    ♣ The firm should ensure only clients and work of an acceptable


    level of risk are accepted. This requires consideration of:
    ♣ Integrity of management
    ♣ Competence of the engagement team
    ♣ Compliance with ethical requirements
    ♣ Significant matters that have arisen during the current or
    previous audit engagement and their implications for
    continuing the relationship.
    (iii) Human resources

    ♣ The engagement partner should ensure that the engagement team


    collectively have the competence and capabilities to perform the
    audit in accordance with professional standards.
    ♣ This includes knowledge of professional standards, knowledge
    of relevant industries in which the client operates, the ability to
    apply judgment and an understanding of the firm's quality
    control policies and procedures.
    (iv) Engagement performance
    ♣ Engagement performance comprises direction, supervision and review of
    the engagement.
    ♣ Direction involves informing team members of:
    ♣ Their responsibilities
    ♣ Objectives of the work to be performed
    ♣ The nature of the business
    ♣ Risks
    ♣ Problems that may arise
    ♣ The detailed approach to the performance of the engagement.
    ♣ Supervision includes:
    ♣ Tracking the progress of the audit to ensure the timetable can be
    met
    ♣ Considering the competence of the team
    ♣ Addressing significant matters arising and modifying the planned
    approach accordingly
    ♣ Identifying matters for consultation. Consultation may be required
    where the firm lacks appropriate internal expertise.
    ♣ Review responsibilities include consideration of whether:
    ♣ The work has been performed in accordance with professional standards
    ♣ Appropriate consultations have taken place
    ♣ The work performed supports the conclusions reached
    ♣ The evidence obtained is sufficient and appropriate to support the auditor's
    report.
    ♣ The objectives of the engagement procedures have been achieved.
    ♣ The engagement partner should perform a review of critical areas of
    judgment, significant risks and other areas of importance throughout the
    audit. The extent and timing of the partner's reviews should be documented.
    (v) Engagement Quality Control Review (EQCR)
    ♣ Listed entities and other high risk clients should be subject to an engagement quality control review.
    ♣ This is also referred to as a pre-issuance review or 'Hot' review.
    ♣ High risk clients include those which are in the public interest, those with unusual circumstances and
    risks, and those where laws or regulations require an EQCR.
    ♣ An EQCR includes:
    ♣ Discussion of significant matters with the engagement partner.
    ♣ Review of the financial statements and proposed auditor’s report.
    ♣ Review of selected audit documentation relating to significant judgments and conclusions
    reached. This includes:
    ♣ Significant risks and responses to those risks
    ♣ Judgments with respect to materiality and significant risks
    ♣ Significance of uncorrected misstatements
    ♣ Matters to be communicated to management and those charged with governance, and
    where applicable, other parties such as regulatory bodies.
    ♣ Evaluation of conclusions reached in forming the audit opinion.
    ♣ For listed entity audits, the EQCR should also consider:
    ♣ Independence of the engagement team.
    ♣ Whether appropriate consultation has taken place on
    contentious matters or differences of opinion.
    ♣ Whether documentation reflects the work performed in
    relation to significant judgments.
    Eligibility criteria

    ♣ The engagement quality control reviewer:


    ♣ Should have the technical qualifications to perform the role,
    including the necessary experience and authority, and
    ♣ Should be objective. To be objective the reviewer should not be
    selected by the engagement partner and should not participate
    in the engagement.
    ♣ Note: An engagement quality control reviewer may also be

    referred to as an independent review partner.


    (vi) Monitoring

    ♣ Quality control policies alone do not ensure good quality


    work.
    ♣ Firms should carry out post-issuance or 'cold' reviews to
    ensure that quality control procedures are adequate, relevant
    and operating effectively.
    Post-issuance (cold) review
    Purpose To assess whether the firm's policies and procedures were implemented during an engagement and to
    identify any deficiencies therein.
    When After the auditor's report has been signed.
    Which files A selection of completed audit files.
    Conducted by A dedicated compliance or quality department/a qualified external consultant/an independent partner.
    Matters considered Working papers should demonstrate that:
     Sufficient appropriate evidence has been obtained.
     All matters were resolved before issuing the auditor's report.
    All working papers should be:
     On file
     Completed
     Signed as completed
     Evidence as reviewed.
    Outcomes A report of the results will be provided to the partners of the firm highlighting deficiencies that
    require corrective action. Recommendations will be made including:
     Communication of findings
     Additional quality control reviews
     Training
     Changes to the firm's policies and procedures
     Disciplinary action.
    Thank You

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