Audit, Assurance and Related Services

Online

Muhammad Aleem Zubair

Lecture 6

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10 August 2018
THE AUDITOR’S RESPONSES TO ASSESSED RISKS –
ISA330

• Overall responses
• Audit Procedures Responsive to Risks of Material
Misstatement at the Assertion Level
• Considering the nature, timing, and extent of further audit
procedures
• Tests of Controls
- Using audit evidence obtained in previous audits:
• Controls have changed  test the operating effectiveness of such
controls in the current audit.
• Controls have not changed  test at least once in every third audit.
• Controls that mitigate a significant risk  test in the current period

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ISA 330

• Substantive procedures:
- Agreeing or reconciling the financial statements with the
underlying accounting records; and
- Examining material journal entries and other adjustments
made during the course of preparing the financial statements.

• The greater the risk of material misstatement, the greater the

extent of substantive procedures.

• Evaluating the Sufficiency and Appropriateness of Audit

Evidence Obtained

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COMPUTERS IN AUDITING

• General controls
- Development
- Program changes
- use of incorrect programs or data files
- Unauthorised amendments to data files
- continuity of operations
• Application controls
- processed transactions have been properly authorised, and
- the processing of data is complete, accurate and timely.
- Input, Processing, Master files and standing data

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 COMPUTERS IN AUDITING

• On-line systems,
• EDI
• E-commerce
• M-commerce

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Professionals’ Academy of Commerce
Computer-assisted audit techniques (CAATs)

• Audit software
• Embedded audit facilities.
• Test data
• Advantages of CAATs
• Disadvantages of CAATs
• The impact of IT in modern auditing

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MATERIALITY IN PLANNING AND PERFORMING AN AUDIT-
320

• Materiality in the Context of an Audit

• Determining Materiality and Performance Materiality When

Planning the Audit

• Use of Benchmarks in Determining Materiality for the Financial

Statements as a Whole
• Revision as the Audit Progresses

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10 August 2018
Question and Answer session

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 Thanks! That’s
all for today.

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