Nexia International Audit Conference Paris 2011 The IFAC Guide and the Auditor of the Future George S Dakis Nexia ASR Melbourne, Australia

The IFAC Guide and the Auditor of the Future IFAC Guide Core Principles Developing an audit methodology Developing a paperless electronic audit The future of auditing techniques

IFAC Guide Volume 1 – Core Concepts Volume 2 – Practical Guidance Examples, case studies, theory No tool kit or templates.

IFAC Guide Volume 1 – Core Concepts The Risk Based Audit Internal Control – Purpose and Components Assertions Materiality and Audit Risk Risk Assessment Procedures Accounting Estimates Related Parties Audit Documentation Forming an Opinion

IFAC Guide Volume 2 – Practical Guidance Phase A – Risk Assessment Risk Assessment Engagement acceptance and continuance Audit Strategy Materiality Performing Risk Assessment procedures

IFAC Guide Volume 2 – Practical Guidance (continued) Phase B – Risk Response Responsive Audit Plan Determining the extent of testing Documenting work performed Written representations

IFAC Guide Volume 2 – Practical Guidance (continued) Phase C – Reporting Evaluating audit evidence Communicating with those charged with governance Auditor’s report and modifications

IFAC Guide Audit Methodology Process Map Refer page 1 only of Appendix A

Nexia Australia & New Zealand Audit Methodology Composition of Audit Methodology IFAC Guide deficient in certain areas Materiality and policies created How can we use the IFAC Guide to develop and implement an Audit Methodology? Refer Appendix B

Nexia Australia & New Zealand Audit Methodology Audit Methodology Process Map Refer to pages 2 - 5

The Future of Audit Techniques Example IDEA

CAATS – IDEA We will: View Field Statistics (refer Appendix C) Random and Stratified Random Sampling (refer Appendix D) Data Extraction (refer Appendix E) Data Analysis (refer Appendix E) Stratification and Data Extraction (refer Appendix F) Join Databases and Extract Data (refer Appendix G) Identify Duplicate Fields (refer Appendix H) Identify Gap Field (refer Appendix I) The Future of Audit Techniques

Questions?