1. PERFOMING THE AUDIT & EVALUATION OF MISSTATEMENTS

2. Discussion outline Introduction, Evidence gathering techniques,
Step by Step Approach: Key Focus Areas,
Working papers,
Exercise.

3. Introduction: Where Are We?

4. Introduction: Applicable Standards
On level 3 of the ISSAI framework
ISSAI 200 par. 102; ISSAI 200 par. 126
ISSAI 200 par ; ISSAI 200 Par
On level 4 of the ISSAI framework
ISSAI 1240; ISSAI 1250; ISSAI 1315; ISSAI 1330
ISSAI 1450; ISSAI 1500; ISSAI 1520; ISSAI 1530

5. Introduction: Objectives
Performing relevant procedures for each material class of transactions, account balance and disclosure, irrespective of the assessed risks of material misstatement;
Determining the extent of testing (sample sizes)
Documenting audit procedures in such a way as to obtain sufficient appropriate audit evidence and thus draw conclusions on which to base the auditor’s opinion;
Keeping a full record of misstatements identified during the audit;
Identify key audit matters and concluding on whether sufficient audit work has been done for all components.

6. Evidence gathering techniques,
Inspection
Observation
Inquiry
Confirmation
Recalculation
Reperformance
Analytical reviews

7. Exercise Evidence gathering
For each identified technique:
1. Identify a situation where it is applicable,
2. Identify the type of evidence to be obtained.

8. Step by Step Approach: Key Focus Areas,
Perform and document audit procedures,
2. Compile a full record of misstatements identified during the audit,
3. Conclude whether all audit work has been completed sufficiently for all components,
4. Perform audit work for the overall financial statements.

9. Step1: Perform and document audit procedures
Test of Controls
Step
Key Focus Area
1. Determine the sample size,
Recommended Sample size
2. Select the sample items,
Random Number Sampling Vs Interval Sampling
3. Perform the planned procedures on the selected items,
Workpaper PA 1
4. Evaluate the sample results and conclude.
The 4 options/possibilities

10. Exercise TEST OF CONTROLS

11. Step1: Perform and document audit procedures
Substantive Analytical Procedures
Step
Key Focus Area
1. Establish the expected value of the population being audited
Dependent variables/indicators
2. Define the tolerable error margin
5% of expectation threshold
3. Compare results and conclude
Investigate differences - W/p PA 2; 4

12. Exercise ANALYTICAL PROCEDURES

13. Step1: Perform and document audit procedures
Substantive Test of Details
Step
Key Focus Area
1. Determine the sample size
100%; Stratification and Sampling
2. Select the sample items
Random Number Sampling Vs Interval Sampling
3. Perform the planned procedures on the selected items
Work paper PA 2; 3
4. Evaluate the sample results and conclude
Projected misstatement formula

14. Exercise TEST OF DETAIL

15. STEP 2: Accumulate and evaluate misstatements
Step
Key Focus Area is Work paper PA 6
a. Obtain an understanding of the results of audit procedures performed on individual financial statement items,
b. Accumulate the misstatements taking into consideration the correction of misstatements,
c. Consider the effect of uncorrected misstatements from the prior period,
d. Determine whether uncorrected misstatements are material individually or in aggregate.

16. Exercise evaluate misstatements

17. STEP 3: Perform audit work for the overall financial statements
Step
Key Focus Area
1. Confirm the teams independence,
none
2. Consider subsequent events,
3. Update lead schedule and perform final analytical review,
Work paper UE 1 Step 8

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