Auditing and Assurance Notes Essay

Week 1Purpose of audit heighten the degree of confidence of intended users in the financial report. Expression of an stamp by the attender on whether the FR is prepared, in all visible respects, in accordance with applicable financial reporting framework. Opinion whether the FR is presented joinly, in all material aspects, give a true and fair view in accordance with the framework.ASA require auditor to exercise professional person judgment and maintain professional skepticism by dint ofout the planning and executing of the audit to Identify and assess attempt of material misstatement, whether due to contrivance or error, based on an understanding of the entity and its environment, including the entitys internal control. attain sufficient appropriate audit evidence about whether material misstatement exist, through designing and implementing appropriate responses to the assessed fortunes. Audit process (planning, audit evidence, audit reporting)1. prepUnderstanding the business and determining riskAssessment of the internal controls find significant risks for which special audit attention charters to be concentrate 2. Evidence gatheringTests of controlsSubstantive tests3. Formation of the audit opinion supply take a chance identificationwhat approaches/ procedure the auditor needs to adopt to bring down audit risk. Plan- so that audit will be performed in an efficacious manner. Key engagement team members in the planningappropriate tint control proceduresConsideration of comparisons of the entitys financial cultivation Comparable information for prior periodsAnticipated results of the entitySimilar industry informationAudit Risk- the risk of material misstatement of financial report Assertion levelInherent Risk (IR)the susceptibility () of an assertion() to material misstatement, assuming there are no relate controls, IR factors are generally business risks (BR) affecting a particular proposition account assertion. Control Risk (CR)the ris k of an assertion being materially misstated because controls will not prevent, or incur and correct errors on a timely basis. CR is the impact of the presence or absence of in force(p) internal control designed to mitigate entitys business riskDetection Risk (DR)the risk that the auditor will not detect the material misstatement. Can be reduced by proper planning, assignment of staff, professional scepticism (), supervision and reviewPlanning corporalityASA320 Materiality no specific criteria for determining materiality, but rather considers it a point of professional judgement. Determining materiality for planning- 2 stages1. An appropriate benchmark need to be chosen2. Risk assessment based on auditors knowledge of clients business