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ISA 230: Audit Documentation

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Lim Jun Leong

on 18 July 2014

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Transcript of ISA 230: Audit Documentation

ISA 230: Audit Documentation
Scope
Nature and
Purposes
Objectives
Requirements
Timely preparation
of Audit
Documentation
Documentation of the
Audit Procedures Performed
and
Audit Evidence Obtained
Form, Content and Extent
of
Audit Documentation
Departure from a
Relevant
Requirement
Matters arising
after the
Date of the
Auditor's Report
Assembly of the
Final Audit File
Deals with the
auditor’s responsibility
to
prepare audit documentation
for an
audit of financial statements
.
Specific documentation requirements of other ISAs do not limit the application of this ISA.
Law or regulation may establish additional documentation requirements.

Scope

Audit documentation provides:
Evidence of the auditor’s basis for a conclusion
about the
achievement of the overall auditor’s objectives
Evidence
that the
audit was planned
and
performed in accordance with ISAs
and
applicable legal and regulatory requirements.
Additional purposes
Assist engagement team to plan
and
perform the audit
Assist engagement team
responsible for supervision to
direct
and
supervise the audit work
Enabling the engagement team
to be
accountable for its work
Retaining a record of matters
of
continuing significance
to
future audits
Enabling the conduct of quality control reviews
and
inspections
External inspections
can be
conducted in accordance with applicable legal, regulatory or other requirements.


Nature and Purposes

To
prepare documentation
that provides:
Sufficient
and
appropriate record of the basis for the auditor’s report
Evidence
that the
audit was planned
and
performed in accordance
with
ISAs
and
applicable legal and regulatory requirements

Objective

Audit documentation shall be
prepared
by auditor on a
timely basis
.
To
enhance the quality of the audit
Facilitates the effective review
and
evaluation of the audit evidence obtained
and
conclusions reached
before the auditor’s report is finalized

Timely preparation of Audit Documentation

The auditor shall
prepare audit documentation
that is
sufficient
to
enable an experienced auditor
, having no previous connection with the audit, to
understand
:
The
nature, timing
and
extent
of the
audit procedures performed
to
comply
with the
ISAs
and
applicable legal and regulatory requirements
The
results of the audit procedures performed
, and
the audit evidence obtained
Significant matters arising
during the audit,
the conclusions reached
thereon, and
significant professional judgements made
in reaching those conclusions
The auditor shall
document how the auditor addressed the inconsistency.

Form, Content and Extent of Audit Documentation

In
documenting
the
nature, timing and extent
of audit procedures performed, the auditor shall record:
The
identifying characteristics of the specific items
or
matters tested
Who performed
the
audit work
and
the date
such work was
completed
Who reviewed
the
audit work performed
and t
he date
and
extent of such review

If, in
exceptional circumstances
, the auditor judges it
necessary to depart
from a relevant requirement in a ISA, the auditor shall
document how the alternative audit procedures performed

achieve the aim of that requirement, and the reasons for the departure.

Departure from a Relevant Requirement

Designed
to
enable
the auditor to
achieve the objectives specified in the ISAs
, and thereby the
overall objectives of the auditor
.
A requirement is not relevant only in the cases where:
The
entire ISA is not relevant
– for example, internal audit function where not every entity has it, therefore, nothing in ISA 610 is relevant.
The
requirement is conditional
and the
condition does not exist
– for example, the requirement to modify the auditor’s opinion where there is an inability to obtain sufficient appropriate audit evidence, and there is no such inability.

Departure from a Relevant Requirement

If, in
exceptional circumstances
, the auditor
performs new
or
additional audit procedures
or
draws new conclusions

after the date of the auditor’s report
, the auditor shall document:
The
circumstances encountered
The
new or additional audit procedures performed
,
audit evidence obtained
, and
conclusions reached
, and their
effect on the auditor’s report
When
and
by whom
the
resulting changes to audit documentation were made
and
reviewed
.

Matters Arising after the Date of the Auditor’s Report

The auditor shall
assemble the audit documentation
in an
audit file
and
complete the administrative process
of assembling
the final audit file and
shall not delete
or
discard audit documentation of any nature
before the end of its retention period.


Assembly of the Final Audit File

Questions
1.
ISA 230: Audit Documentation
deals with the auditor's responsibility to prepare audit documentation for an audit of financial statements. What are the
purposes
of audit documentation?
Answer: (click once for the answer)
2. One of the requirement of
ISA 230: Audit Documentation
is to prepare audit documentation on a timely basis. What are the
importance
of preparing audit documentation on a timely basis?
Answer: (click once for the answer)
3. Under one of the requirements of ISA 230: Audit Documentation, if there is any departure from a relevant requirement in an ISA, the auditor shall document how the alternative audit procedures performed achieve the aim of that requirement, and the reasons for tthe departure.
State
the
reason
for this requirements and
state two documentation requirement
that is
not relevant with example.
Answer: (Click once for the answers)
4. In some exceptional circumstances, the auditor performs new or additional audit procedures or draws new conclusions after the date of the auditor's report.
State 3 documents
the auditor shall prepare.
Answer: (Click once for answer)
5.
ISA 230: Audit Documentation
require the form, content and extent of audit documentation. What are the
factors that will affect the form, content and extent of audit documentation
?
The form, content and extent of audit documentation depend on factors such as:
The
size
and
complexity of the entity
The
nature of the audit procedures
to be performed.
The
identified risks of material misstatement
.
The
significance of the audit evidence obtained
.
The
nature
and
extent of exceptions identified
.
The
need to document a conclusion
or the
basis for a conclusion not readily determinable
from the documentation of the work performed or audit evidence obtained.
The
audit methodology and tools
used.
Answer: (Click once for answer)
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Full transcript