Audit Planning and Analytical Procedures(英文版)(ppt 57页).pptx
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1、8-1Audit Planning andAnalytical ProceduresChapter 88-2PlanningThe work is to be adequately planned,andassistants,if any,are to be properly supervised.Acceptable audit risk the acceptability of giving the wrong audit opinion.Inherent risk the risk of material mistatements making it into the financial
2、 statements.8-3Planning an Audit and Designing an ApproachAccept client andperform initialaudit planningUnderstand theclients businessand industryAssess clientbusiness riskPerform preliminaryanalytical procedures8-4Planning an Audit and Designing an ApproachSet materiality,andassess acceptable audit
3、risk and inherent riskUnderstand internalcontrol and assesscontrol riskDevelop overallaudit plan andaudit program8-5Initial Audit PlanningShould the auditor accept a new client?Identify why the client wants or needs an audit.Obtain an understanding with the client.Select staff for the engagement.8-6
4、The Pre Engagement Arrangements:nClient acceptance and retentionnTalking with predecessornEngagement lettersnEngagement teamnTime budget8-7Evaluate the Acceptance or Retention of a Client.nObtain financial information-prepared by client,annual reports,SEC reports,reports to regulatory agencies,and i
5、nterim reports.nInquire to clients banker,legal council,underwriter and others.nContact predecessor auditor for disagreements with client,client integrity.nDetermine need for special skills or unusual risk related to client.nReview independence relationship to client.8-8Talking with PredecessornThe
6、successor auditor needs permission from the client to contact the predecessor to protect client confidentiality.nPredecessor can give valuable information about client integrity,significant issues,disagreements and reasons for auditor change(8K).nThe successor auditor will issue a report on the curr
7、ent year only.The prior years will be covered by reissuing the predecessors report.8-9Engagement lettersnHelp establish an understanding of the terms of the engagement,contract nAre not required but recommended.nHelps to avoid misunderstandings related to what the services include and feesnHelps avo
8、id legal liability assertions based on failure to do work that the CPA may not have contemplated.8-10Engagement Letter ContentnThe objectives of the engagementnManagements responsibilitiesnThe auditors responsibilitiesnAny limitations of the engagementnSAS 83 requires these understandings to be docu
9、mented in the working papers.8-11Full service audit team includesnEngagement partnernSecond audit partnernAudit managernSenior in chargenSpecialists as needed-statistical,computer,industrynTax partnernConsulting service partner8-12Second Audit PartnernTo have a review by a partner that is not direct
10、ly responsible for keeping the client happy and therefor more objective.nThe second audit partner is required by the SEC for publicly traded companies8-13Time BudgetnEstimates time for audit activitiesnBasis for fee structurenBudget control for time spent on audit8-14Audit program nLists the audit p
11、rocedures believed necessary to obtain sufficient,competent audit evidence.n A written audit program is required by the standards.nTo prepare an audit program,the auditor needs an understanding of the clients business.8-15Understanding the clients business includes:n Economic environment the busines
12、s operates in.n Effect of national economic policies-deregulation.n The geographic location and its economy.n Tax and regulatory developments.n Industry characteristics.n Significant computer applications involving the accounting system.8-16 Ways to get an understanding of the clients business:nInqu
13、iry of companys management,internal auditors,directors and audit committee nReview of prior years audit working papers and inquiry of prior staff on audit to convey their understanding.nObservation of physical plant looking for possible items that may affect the financial statements such as obsolete
14、 inventory.nStudy of AICPA industry guides and periodicals for the industry like the Wall Street Journal.nAnalytical procedures on F/S8-17Understanding of the Clients Business and IndustryUnderstand Clients Business and Industry Industry and External EnvironmentBusiness Operations and ProcessesManag
15、ement and GovernanceObjectives and StrategiesMeasurement and Performance8-18Industry and External EnvironmentWhat are some reasons for obtaining an understanding of the clients industry and external environment?Risks associated with specific industriesInherent risks common to all clients in certain
16、industriesUnique accounting requirements8-19Business Operationsand ProcessesFactors the auditor should understand:major sources of revenue sources of revenue key customers and suppliers sources of financing information about related parties ability to obtain financing8-20Management and GovernanceMan
17、agement establishes the strategies andprocesses followed by the clients business.Governance includes the clients organizationalstructure,as well as the activities of the boardof directors and the audit committee.Corporate charter and bylawsMinutes of meetings8-21Client Objectivesand StrategiesStrate
18、gies are approaches followed by theentity to achieve organizational objectives.Auditors should understand client objectives.FinancialreportingreliabilityEffectivenessand efficiencyof operationsCompliancewith laws andregulations8-22Obtaining the financial statements.n The financial statements are man
19、agements responsibility and are considered managements assertions about the economic actions and events.nProduced from clients accounting records and trial balance.8-23Trial BalancenTies to financial statementsnRepresents managements assertionsnUsed to perform analyticsnUsed to organize the audit pr
20、ocedures8-24Summary of Planning the AuditnBackground and understanding of ClientnRetain copies of financial statementsnAnalyze financial statements(analytical procedures)nTie trial balance to F/SnOrganize trial balance into cycles for audit procedures8-25Assess Client Business RiskClient business ri
21、sk is the risk that theclient will fail to achieve its objectives.What is the auditors primary concern?material misstatement of the financialstatements due to client business risk8-26Other Planning IssuesnMateriality-effectiveness and efficiencynFirst Time Audits beginning balancesnInternal Auditors
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