ASA200: obtain reasonable assurance FR as a whole free from MM due to

fraud/error, express opinion, in all material aspects, in accordance with applicable

FR framework.
FS; Compliance (follow policies, procedures, regulations); Performance
(Efficiency, Effectiveness); Comprehensive; Environmental; Internal

Independent; internal; Gov; Tax

Assurance Engagement: express conclusion to enhance confidence about outcome
Attestation Service: issue written communication to express conclusion reliability
of written assertion
- agency cost; access to capital markets; - CoC; detect fraud & inefficiency;
control & operational improvements; insurance; info hypothesis
X Time lapse/relevance; audit testing on selective samples; assessment of
materiality; professional judgement/estimation; report format limitation;
collusion
ASA 220: Quality Control
Engagement Team (ET) implements QC procedures applicable to audit engagement
1. Leadership Responsibilities for quality on audits (by E partner)
(Set example on audit quality through action/ messages)
2. Ethical requirements (E partner ensure team complies with relevant)
(Remain alert/enquiry/observation) (Identify & resolve)
3. Client Evaluation (acceptance and continuance)
(Integrity of key mgt; competence; ethical requirements; sig matters)
4. Assignment of E teams (E partner shall satisfied that team has appropriate
capabilities, competence and time to perform E)
5. Engagement Performance
(a) Direct, supervise, perform (inform responsibility & approach; track)
(b) Review (by more experienced) (documentation & discussion)
(c) Consultation (difficult/contentious matter)
(d) Engagement QC review (evaluate judgement & conclusion)
(e) Differences of Opinion (resolve)
6. Monitoring (policies & procedures on QC)
7. Documentation
Audit Responsibilities (CA): form opinion; report on compliance with acc stds, true
& fair view, describe defects/irregularities/ describe independence problem
MM: combined uncorrected error/fraud (misappropriate A; fraudulent reporting)
influence users
CONDITION > MATERIALITY > TYPE OF REPORT> PREPARE REPORT
1. MM (Disagreement with mgt on compliance, disclosure adequacy, appropriate
acc policies & application/ Conflict between framework)
1. SCOPE LIMITATION
2. Immaterial/ Material (extreme & pervasive)
3. Unmodified (required evidence obtained, proper records, consistent with CA &
AS, consistent with directors discussion, disclose defects) (T&F)
3. Qualified (MM & Scope) (rely all except) (x extreme/pervasive)
3. Adverse (MM) (overall usefulness impaired) (extreme/pervasive)
3. Disclaimer of opinion (Scope) (unable to express)(multiple uncertainties)
* Key Audit Matter (describe significant areas high MM risk; high estimation
uncertainty) (why and how addressed)
* Emphasis of Matter (draw attention to disclosure/presented; x MM) (uncertainty
disclosed; FR re-issued; early application; catastrophe; + disclosure)
* Other Matter (other than presented/disclosed in FR) (diff framework; SPFR)
Going Concern (responsibility to assess clients GC status over relevant time period)
Financial (Ratios, borrowings, losses, bad debts, insolvency)
Operating (Loss of mgt / labour / key markets)
Other (Uninsured disaster/ Litigation)
Inappropriate
GC (adverse); X GC (Adequate Disclosure unmodified with emphasis
of matter)(X disclosed (qualified/ adverse))
Appropriate but material uncertainty
Disclosed (Material Uncertainty Section); X disclosed (qualified/ adverse)
Management assertions: implied /expressed representations by mgt about Classes of
transactions, Acc bal/, presentation & disclosure FS (test accuracy to assess MM)
1. Existence (B/S) & Occurrence (Transaction) overstatement
2. Completeness understatement
3. R&O (B/S) ownership and liability claims
4. Valuation and allocation
- Realisable Value (B/S)
- Classification (B/S)
- Detail tie in (Journal to Ledger)
- Cut off (B/S) Timing (Transaction)
- Accuracy (Transaction)(Invoice to Journal)
- Posting & Summarisation (IS)
Corporate Governance (External assure society/ Internal audit, committee oversee)

APES 110: Independence

Mind - state permits expression of conclusion without influences compromise
professional judgment, allowing integrity, objectivity and professional scepticism.
Appearance Avoid facts & circumstances significant reasonable & informed 3rd
party likely conclude teams, integrity, objectivity, P Scepticism compromised
APES 110 Integrity (honest); Objectivity (x bias); Prof Competence & Due Care
(knowledge, skill); Confidentiality (x disclose/personal adv); Professional Behaviour
(comply, x discredit)
ISSUE > THREAT to obj & indep > CA/APES110/ASA220 > SAFEGUARDS
1. Financial Interest (CA prohibit material shh/ APES110 assess materiality *sell
shh); Gifts & Hospitality (APES110 trivial & inconsequential nature,
value, intent *decline); Fee (regulated by APES110 *disclose, advance
written agreement); Provision of Non-Audit/Assurance service (CA disclose
in Directors report on indep & fees/ APES110 prohibit except in emergency
situations for non-public interest entities); Personal/Business/Employment
r/s (CA & APES110 prohibit; APES110 & CLERP 9 Mandatory cooling off
period 2y); Same team (CA lead auditor rotation every 5y; APES110 rotate
7y)
2. Self-Interest (reluctant to issue, potential ve impact, affect personal wealth)
2.
Self-Review (x appropriate evaluate previous judgement relied)
2. Advocacy (promote clients position, objectivity compromised)
2.
Familiarity (close r/s, sympathetic & accepting)
2.
Intimidation (deter from acting objectively because of pressures)
4.
*Review by independent 3rd party, remove from team, decline/ terminate E
4.
*Appropriate procedures checking members compliance indep requirements
4.
*Profession, Legislation, Regulation (education, training, experience,
continuing development, professional stds, regulatory monitoring, external
review, establish & enforce policy, prohibit non-member influence, additional
quality review of work, rotate senior personnel)

Audit Risk Model (help develop strategies & design audit procedures to obtain
sufficient appropriate evidence to form opinion)
DR = AR / (IR x CR)
1. Set AR (inappropriate opinion when FS is MM)
2. Assess IR (susceptibility of assertions to MM) & CR (IC x prevent/detect MM)
(Risk assessment procedures obtain understanding of entity & environment)
3. Obtain DR (audit testing x detect misstatement) allowed & determine Audit
Strategy (predominantly substantive High CR, poor IC, x rely IC, - TOC
(effectiveness of IC) , + Substantive test (detect MM at the assertion level); lower
assessed level of CR approach - +TOC, - Substantive Tests)
4. Choose appropriate Audit Procedures (Instructions for collection of evidence
TOC/Substantive Tests) & prepare audit program (list of audit procedures
general objective, specific objective, procedure, type of evidence)
5. Sample Selection
6. Perform Audit Procedures
7. Evaluate evidence & form conclusion
ASA500: Design & perform procedures to obtain sufficient (materiality, risk of
MM, population size & characteristics, effectiveness of IC, economic constraint)
appropriate (relevance to objective, reliability of source external vs internal,
independence, objectivity, effectiveness of IC, knowledge, qualification, experience,
accustomed to confirmations, proper accounting records, timeliness, subjective
judgement vs objective assertion, oral vs written)
1. Documentation Inspection (Examine, Read, Compare)
- Trace (Source to Ledger understatement; completeness, accuracy, cut off)
- Vouch (Ledger to Source overstatement; existence, occurrence, accuracy)
2. Physical Inspection (Count) Existence/Quality
3. Observation (Use senses, tour) rarely sufficient; + corroborative evidence
4. Enquiries of client (x conclusive, x independent source, bias)
5. External Confirmation (ASA500: obtain direct written response to verify
accuracy
of info from 3rd party in paper form, electronic or other medium) +ve/-ve
6. Recalculation (Recompute) check mathematical accuracy of doc
7. Reperformance (Foot) Auditors independent execution of procedures/control
8. Analytical Procedures (Scan, compute) (ASA520: evaluations of FI through
analysis of plausible r/s among financial & non-financial data) (compare client
data with industry, prior period, forecast) (understand industry & business, identify
potential misstatement investigation area, - substantive testing, assess going
concern)(unusual fluctuation, possibility of misstatement, substantive testing)(x
sufficient to conclude, other supportive evidence determine materiality)