Kế toán, kiểm toán - Planning and risk

PART TWO:Planning and Risk1Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettCHAPTER 5OVERVIEW OF ELEMENTS OF THE FINANCIAL REPPORT AUDIT PROCESS2Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettACCOUNTING AND AUDITING CONTRASTEDFig. 5.1 Relationship between accounting and auditing (p.177)3Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettAREAS OF AUDIT INTERESTAccountable activity of the entityCollection of original accounting dataAllocation and reclassification of accounting dataPresentation of resultsOrganisation of the entityExternal relationshipsInternal organisational structure4Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettFINANCIAL REPORT ASSERTIONSExistenceOccurrenceCompletenessRights and obligationsValuationMeasurementPresentation and disclosure5Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettASSERTIONS AND OBJECTIVES FOR INVENTORYExample 5.1 Assertions and objectives for the account balance of inventory of a manufacturing company (p. 183)Financial report Illustrative audit objectivesassertionExistence n Inventories included in statement of financial position physically exist. n Inventories represent items held for sale in normal course of business.Completeness n Inventory includes all products, materials and supplies owned by the company that are on hand, in transit or stored at outside locations.Rights and n The company has legal title of ownership to the inventories.obligations Valuation n Inventories are properly stated at cost (except when net realisable value is lower). n Slow-moving, defective and obsolete items included in inventories are properly identified and valued.Measurement n Inventory is recorded at the correct amount in the correct period.Presentation and n Inventories are properly classified as current assets with major disclosure categories and their bases of valuation adequately disclosed. Note: Assertion of Occurrence relates to transactions related to inventory, not the balance6Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettAUDIT EVIDENCEFig. 5.2 The audit equation (p. 184)7Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettEXAMPLE OF A CASH PURCHASE TRANSACTIONFig. 5.3 A cash purchase transaction (p.184)8Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettAUDIT PROCEDURESInspectionObservationInquiryConfirmationComputationAnalytical procedures9Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettTransactions traced from initial entry in system to intermediate records, where transactions become components of subtotals, and ultimately to disposition in final records, where subtotals are summarised for presentation in financial report.Direction of tracing can be modified: auditor can trace from point of initiation of transaction to final recording (assertion of completeness), or trace from final record back to point of initiation (assertion of existence).THE AUDIT TRAIL10Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettSELECTING AUDIT PROCEDURESInfluenced by the following factors:Auditor’s assessment of inherent riskNature of the internal control structure and assessment of control riskMateriality of particular component of financial report Experience gained from previous auditsResults of other audit proceduresSource and reliability of information available11Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettSufficiency — quantity of audit evidencenecessary to provide the auditor with areasonable basis for an opinion on the financialreport.Appropriateness — quality of audit evidence. Two dimensions:Relevance — relates to the financial report assertion of interest.Reliability — influenced by its source and nature.SUFFICIENT APPROPRIATE AUDIT EVIDENCE12Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettRELIABILITY OF AUDIT EVIDENCEEvidence from sources outside an entity is more reliable than evidence obtained solely from within an entity.Evidence generated internally is more reliable when the internal control structure is effective.Evidence obtained directly by the auditor is more reliable than evidence obtained from the client.Evidence in the form of documents or written representations is more reliable than oral representations.13Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettAUDIT RISK AT THE FINANCIAL REPORT LEVELAudit risk is the risk that the auditor will give an inappropriate audit opinion when the financial report is materially misstated.Before issuing an opinion on the financial report, the auditor needs to reduce audit risk sufficiently to make the opinion reliable.14Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettThe auditor reduces audit risk by performing audit procedures until there is sufficient appropriate evidence for each assertion of each significant transaction class or account balance to provide reasonable assurance that the financial reports are not materially misstated.The audit risk model focuses audit effort on those classes of transactions or balances that are likely to contain material misstatements.REDUCING AUDIT RISK15Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettThree components:Inherent risk: (IR) susceptibility of an assertion to material misstatement given inherent and environmental characteristics, but without regard to prescribed control procedures.Control risk: (CR) risk that material misstatement might not be prevented or detected by internal control procedures.Detection risk: (DR) risk that auditors’ substantive procedures lead auditor to conclude no material misstatement when there is one.COMPONENTS OF AUDIT RISK (AR)16Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettAR = f (IR, CR, DR)THE AUDIT RISK MODEL17Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettGRAPHICAL DEPICTION OF AUDIT RISKFig. 5.4 Audit risk,graphically depicted (p. 192)18Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettAuditor cannot change inherent risk.Auditor cannot directly change control risk. Auditor can obtain evidence to support an assessed level of control risk less than high (expect to rely on internal control) by examining control environment, information system and control procedures and testing their effectiveness.REDUCING AUDIT RISK I19Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettThe level of detection risk is the lever the auditor can pull to reduce audit risk by:Appropriate planning, direction, supervision and reviewDecisions on the nature, timing and extent of audit proceduresEffective performance of procedures and evaluation of resultsREDUCING AUDIT RISK II20Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettINTERRELATIONSHIP OF COMPONENTS OF AUDIT RISKExhibit 5.1 The interrelationships of the components of audit risk (p. 193) 21Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettDefined:Risk that entity’s business objectives will not be obtained as a result of external and internal factors, pressures and forces brought to bear on entity and, ultimately, the risk associated with the entity’s survival and profitability.Requires extensive knowledge of client’s business and industry.Recent audit methodologies emphasise assessment of strategic business risk.STRATEGIC BUSINESS RISK22Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettTHE RELATIONSHIP OF STRATEGIC BUSINESS RISK TO THE DETERMINATIONOF AUDIT RISK23Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettTests of controlSubstantive testsTYPES OF AUDIT TESTS24Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettTo obtain evidence about either: (1) the effectiveness of the design of the policies or procedures in the internal control structure; or (2) the operating effectiveness of those policies or procedures.The tests are designed to provide evidence to support an assessment of control risk at a level below high (indicating reliance on the keys controls).TESTS OF CONTROL25Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettTo obtain evidence about the validity and the propriety of the accounting treatment of transactions and balances or, conversely, of errors or irregularities therein.These tests reduce detection risk.SUBSTANTIVE TESTS26Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettAnalytical procedures — study and comparison of relationships between accounting data and related informationTests of details — obtaining evidence on the items (or details) included in an account balance or class of transactions:Tests of transactionsTests of balancesTYPES OF SUBSTANTIVE TESTS27Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettUSING THE WORK OF AN EXPERT OR ANOTHER AUDITORGiven complexity and highly specialised nature of many client operations, auditors often find they are unable to service clients effectively without specialist knowledge. Experts can be internal or external to the audit firm.Audit firms develop industry specialisations, have knowledge management systems supporting the specialisations and have employees designated as specialists by industry, function or technical area.28Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettENSURING THAT WORK BY AN EXPERT IS ADEQUATEAn auditor should:Assess skills and competence of expertAssess objectivity and independence of expertCommunicate with expert to confirm terms of engagement and ensure expert understands objective and use of workEvaluate work of expert29Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettUSING THE WORK OF ANOTHER AUDITORAudit work may be undertaken by a number of different auditors. (Consider a consolidated entity with subsidiaries in many countries.) The principal auditor retains responsibility for the overall audit opinion and must ensure the procedures used by other auditors are appropriate for the principal auditor’s purpose.30Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettASSESSING THE WORK OF ANOTHER AUDITORAUS 602 indicates that where an auditoruses the work of another auditor, theprincipal auditor should:Assess professional competence of other auditorAdvise other auditor of requirements applicable to engagementAdvise other auditor of use to be made of work, areas requiring special attention, and timetable.31Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettThese are the specific means used to record auditevidence.Working papers aid in:Planning and performing the auditSupervising and reviewing the audit workGathering evidence and providing essential support for the auditor’s opinionTwo main divisions:Permanent file - store of documents relevant to this audit and future years (e.g. copies of articles of association, continuing contracts)Current working paper file - documentary record of evidence gathered and conclusions reached on this audit.WORKING PAPERS32Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettIncludes:1. Overall audit plan2. Review of accounting system and related internal controls3. Audit program, listing the audit procedures undertaken4. Details of audit testing undertaken5. Working trial balance - schedule of general ledger accounts6. Trial balance working paper schedules, including external documents7. Draft of financial report and audit reportCURRENT WORKING PAPER FILE33Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger Simnett34Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger Simnett