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Lecture 10 - Standards On Auditing (SA 505, 510 and 520) PDF
Lecture 10 - Standards On Auditing (SA 505, 510 and 520) PDF
10 “Standards on Auditing”
(5) SA – 505 “External Confirmations”
Audit Evidence obtained as a direct written response to the auditor, from a third
(I) Positive Request: A request that confirming party respond to the auditor
indicating
or
(II) Negative Request: A request that confirming party will respond to auditor
10.1
Standards on Auditing Chapter 1
evidence on which auditor may draw the conclusion unless the doubt arises.
request. Hence, limited use of -ve request is recommended and should be used
of small amounts.
(d) Auditor is not aware of any circumstance that 3rd party will disregard
the request.
auditor.
10.2
Chapter 1 Standards on Auditing
(f) Special Situations:
and
(Exception arises)
10.3
Standards on Auditing Chapter 1
(6) SA – 520 “Analytical Procedures”
(a) Scope of SA – 520: SA – 520 deals with the use of Analytical procedures as
and
SAPs are generally more suitable for large volume of transactions that
of a grade scale
10.4
Chapter 1 Standards on Auditing
- Different types of SAPs will provide different levels of assurance to
the auditor.
the data.
investigation is required:
shall -
(a) Inquire the management and obtain SAAE for their replies.
10.5
Standards on Auditing Chapter 1
(7) SA – 530 “Audit Sampling”
- Risk that opinion expressed by auditor on the basis of samples may differ from
- Sampling risk may be classified as risk of over reliance and risk of under
reliance.
Under are not effective exists, when actually conclude that initial
are. wrong.
10.6
Chapter 1 Standards on Auditing
groups.
of internal controls.
items.
10.7
Standards on Auditing Chapter 1
entire population:
remaining population.
(e) Factors affecting determination of sample size: ---- Self Study from Book ----
10.8