ENGAGEMENT

COMPLAINCE
REVIEW
KEY ISSUES
Financial Statements Audit - Process

Planning the Document Test the Test the Review the Express an
audit accounting & accounting financial financial opinion
internal and internal statements statements
• Understanding controls controls
systems • Unqualified
the systems • Substantive • Hot file review • Qualified
organisation • Systems testing • Second • Disclaimer /
• Risk Documentation • Test of • Third party reviewer denial
assessment • Gain physical controls confirmations • Proof reading • Adverse
• Materiality assess to • Compliance • Expert opinion • Disclosure
systems tests checklist
• EQCR
 Financial Statements Audit - Process

CONFIRM ASSERTIONS AUDIT PROCEDURES

Completeness Analytical Procedures
Existence Enquiry & Confirmation
Accuracy Inspection of records and
Cut-offs assets
Valuation Observation
Ownership Recalculation /
Presentation / Disclosure Reperformance

ISQC 1 – Quality Control & Client Acceptance and Continuance; ISA 210 - Engagement Terms; ISA 300 : 450
– Audit Planning; ISA 250 – Internal Controls, Laws and Regulations; ISA 230 – Audit Documentation; ISA 500 :
620 – Audit Evidence; ISA 700 : 720 – Reporting Findings; ISA 800 : 810 – Special Considerations; IESBA - Ethics
 DOCUMENTATION
DOCUMENTATION

DOCUMENTATION
AUDIT FILE
ISA 230
ISA 230
AUDIT FILE
DOCUMENTATION
KEY ISSUES
EXTERNAL CONFIRMATIONS
SUBSEQUENT EVENTS
CAPITAL ADEQUACY EVELUATION
RELATED PARTY IDENTIFICATION AND REPORTING
GOING CONCERN
CLIENT AND ENGAGEMENT ACCEPTANCE AND
CONTINUANCE
ANALYTICS
KEY AUDIT MATTERS
AUDIT AND FINANCIAL STATEMENTS DISCLOSURE CHECKLIST
MANAGEMENT REPRESENTATIONS
KEY ISSUES

EXTERNAL CONFIRMATIONS (ISA 505)

Firms did not perform confirmations
Bank confirmation
Debtors circularisation
Creditors circularisation
Laws and Regulations Compliance Confirmation & Litigations and Claims
Confirmation
Firm did not document impact of confirmation responses on
financial statements disclosures
No mention of confirmation not received in work papers and in opinion or ML
(impact on scope of work not documented)
KEY ISSUES

SUBSEQUENT EVENTS (ISA 560)

Firms did not document procedures performed in respect
of subsequent events and the outcomes of work done
Enquiry
Subsequent event identification
Adjusting
Non-adjusting
Client Journals &/or Audit adjustment proposals
KEY ISSUES

CAPITAL ADEQUACY EVELUATION

Firms did not documents procedures and
outcomes on capital adequacy and other
performance-related ratios
Statements in Opinion and ML not supported by
documentation in audit file
KEY ISSUES

RELATED PARTY IDENTIFICATION AND REPORTING

(ISA 550)
Firms did not document procedures and outcomes on
related party transactions
Enquiry
Confirmations
Circularisation
Alternative procedures
Vouching
Analytical procedures
KEY ISSUES
GOING CONCERN (ISA 570)
Firms did not document Directors’ Assessment of Going Concern
Firms did not document Auditors Assessment of Going Concern
Enquiry
Risk Assessments
Credit Risk
Market Risk
Interest Rate / Exchange Rate Risk
Regulatory Non-Compliance, Litigations and Claims
Cash Flow difficulties

Financial Statements Review – Analytics

Equity inadequacy
Negative working capital
KEY ISSUES
CLIENT AND ENGAGEMENT ACCEPTANCE AND
CONTINUANCE
Client acceptance document
Engagement acceptance documents
Signed Engagement Letters
Independence documentations
Engagement budgeting

 NEEDS TO BE APPROVED BY ENGAEMENT PARTNERS OR RISK

MANAGEMENT PARTNER
KEY ISSUES
ANALYTICS
Planning Analytic
Horizontal Analytics
Vertical Analytics (Common-size Analysis)
Ratio Analysis
Completion Analytics
Horizontal Analytics
Vertical Analytics (Common-Size Analysis)
Ratio Analysis
KEY ISSUES

KEY AUDIT MATTERS

Significant risk areas and audit procedures designed to
address them
Not same as matters reported in ML
Require documentation at planning or completion stage
as well as in Opinion under the Key Audit Matter
paragraph
Where none identified, same should be documented in work
papers (planning or Completion section) and in Opinion
KEY ISSUES
AUDIT AND FINANCIAL STATEMENTS
DISCLOSURE CHECKLIST
Firms did not complete and file checklists
Audit check list
ISA Checklist
Financial Reporting checklist
Ghana National Accounting Standards Checklist
IFRS Checklist
KEY ISSUES
MANAGEMENT REPRESENTATIONS
Firms did not file a management representation
letter even though Financial Statements and
Audit Opinion have been signed.
Should be provided by client before financial
statements are signed
Filed at completion section of file
THANK YOU