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COMPLETING THE AUDIT

COMPLETING THE AUDIT. FINAL EVIDENTIAL EVALUATION PROCESSES. After completion of examination: Evidence is summarised & evaluated Steps & activities in the completion stage of the audit – conducted Less routine & subjective judgements involved More experienced & senior staff. AUDIT STEPS.

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COMPLETING THE AUDIT

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  1. COMPLETING THE AUDIT

  2. FINAL EVIDENTIAL EVALUATION PROCESSES • After completion of examination: • Evidence is summarised & evaluated • Steps & activities in the completion stage of the audit – conducted • Less routine & subjective judgements involved • More experienced & senior staff

  3. AUDIT STEPS • Performance of final analytical procedures • Review for loss contingencies • Determining subsequent events • Examining related party disclosures • Evaluation of going concern uncertainty • Obtaining a management representation letter • Final assessment of audit results and detected misstatements • Evaluation of financial statement presentation and disclosure • Working paper reviews

  4. FINAL ANALYTICAL PROCEDURES • FAP • review adequacy of the evidence • Identify any unusual or unexpected balances not previously considered • Re-examine the client’s business risk & inherent risks

  5. REVIEW OF CONTINGENT LIABILITIES • Disclose contingent laibility • Ex – corporate guarantee • Procedures – pg 498 • Legal confirmation letters – pg 498-499

  6. COMMITMENTS • Long term contractual commitments to acquire capital assets • Inquiry of client personnel • Disclose

  7. REVIEW OF SUBSEQUENT EVENTS • Post balance sheet events: • Adjusting ex. Pg. 501 • Non-adjusting ex. Pg 502 • Audit procedures for subsequent events- pg 503

  8. RELATED PARTY DISCLOSURES • Disclose related party transactions • If lack of evidence, auditor need to perform audit procedures: pg. 504

  9. GOING CONCERN CONSIDERATIONS • Assumption – to continue as a going concern • Period: 1 year beyond the year end • Assessment of the entity’s ability to continue as a going concern: pg 505 • Categories: Financial, operating and other = pg. 506

  10. AUDIT REPORTING • Unqualified – if a material uncertainty exists and is adequately disclosed = but, modify auditor’s report by adding emphasis of matter paragraph. • Qualified or adverse opinion • GC clearly exist & not adequately disclose

  11. OBTAINING REPRESENTATION LETTER • Example = see pg 509 • Auditor should evaluate the reliability of management representations by: • See pg 508

  12. EVALUATION OF AUDIT RESULTS & DETECTED MISSTATEMENTS • Evaluate the results of the audit tests – at the completion stage • Sufficiency of audit evidence • The overall effects of detected misstatements on the financial statements

  13. EVALUATING FINANCIAL STATEMENT PRESENTATION AND DISCLOSURE • Senior member of audit team – make final evaluation of financial statements • Final review – looks at compliance with accounting and legal regulations and whether F/S are consistent with the auditor knowledge of the entity’s business.

  14. COMPLIANCE WITH ACCOUNTING AND LEGAL REQUIREMENTS • Reviews the F/S to ensure that there is proper compliance with professional, legal and other regulatory requirements.

  15. WORKING PAPER REVIEW • Review work done by assistants • Audit objectives achieved • Results consistent with conclusions to be expressed • Senior-in-charge • Manageger • Engagement partner – selective = critical audit areas

  16. INDEPENDENT PARTNER REVIEW • Audit of public listed companies

  17. COMMUNICATION WITH MANAGEMENTAND THOSE CHARGE WITH GOVERNANCE • Communicate audit matters of governance interest • Audit committee

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