[toc-this] Show
DefinitionsReliabilityReliability requires that the accounts be free from [link title="material" link="%2Faware%2FGAP%2FPages%2FCA-FA%2FPlanning%2FMateriality.aspx" /] misstatement and bias, and that they can be depended upon by users to represent faithfully that which they claim to represent or could reasonably be expected to represent. Faithful representation requires that transactions and other events are:
The financial statements for a given year must completely and accurately report the cash flows and financial results for that particular year; the assets and liabilities at year-end must be properly recorded in order faithfully to reflect the financial position; and the notes to the accounts must disclose all relevant information. AssertionsAssertions are representations made by auditee management that are embodied in financial statements and transactions. They may be explicit (e.g. where auditee management states that the accounts are prepared based on [link new-window title="International%20Public%20Sector%20Accounting%20Standards%20(IPSASs)" link="https%3A%2F%2Fwww.ipsasb.org%2F" icon="external-link" /] or implicit (e.g. where auditee management implies that transactions for which payments have been made are eligible according to the relevant rules). The auditor uses assertions to consider the different types of potential misstatements that may occur. These assertions are the specific audit objectives about which the auditor wishes to reach a conclusion.InstructionsObjectives of reliability auditsThe overall audit objective for reliability is to establish whether the consolidated annual accounts present fairly, in all material respects, the financial position and the results of operations and cash flows in accordance with the [link title="applicable%20financial%20reporting%20framework" link="%2Faware%2FFA%2FPages%2FConcepts%2FFinancial-reporting-framework.aspx" /] .Audit assertions for reliabilityAssertions about classes of transactions and events for the period under audit
Assertions about account balances at period end
Assertions about presentation and disclosure
Audit of consolidated annual accountsThe following specific elements of the consolidated annual accounts should be audited: Balance sheetThe audit procedures for the Balance Sheet should allow for the verification of the following financial statement items and assertions (examples):
Statement of financial performanceThe audit procedures for the Statement of financial performance are designed to check that the income and expenses occurred, are accurate, complete and correctly recorded in the proper year, and are properly presented and disclosed. Cashflow statementThe audit procedures for the Statement of Cash Flows are designed to determine whether the Statement correctly discloses the cash movements (contributions, income, expenses disbursed and cash position) for the year. Notes to the accountsAudit procedures for the Notes to the financial statements are designed to verify the presentation and disclosure assertions, i.e. that each significant section of the financial statements is duly commented on in the Notes, including off-balance sheet items such as guarantees. Statement of changes in net assetsThe audit procedures regarding the Statement of Changes in Net Assets aim to ensure that changes in net assets are correctly recorded and reported. Reports on budgetary implementationAudit procedures for the reports on budgetary implementation should address the following:
[/toc-this] What ensures completeness accuracy and validity of the transactions recorded in the books?Definition of Vouching
It is to ensure that whether the transactions recorded in the primary books of accounts are matched with the documentary evidence or not. It also helps in checking that the amount mentioned in the transaction is accurate, and the vouchers are free from errors regarding totaling and casting.
What are the 4 common phases in an audit process?Although every audit process is unique, the audit process is similar for most engagements and normally consists of four stages: Planning (sometimes called Survey or Preliminary Review), Fieldwork, Audit Report and Follow-up Review.
What are the audit procedures performed during the completion of an audit?Here are the key steps in completing an audit engagement, with reference to respective ISA.. Step 1 - Final review of the audit file to ensure quality control is in place. ... . Step 2 - Evaluation of misstatements. ... . Step 3 - Review of subsequent events. ... . Step 4 - Review of going concern. ... . Step 5 - Obtaining written representations.. What are the factors to be considered by the auditor in establishing in the overall audit strategy?The audit strategy is based on the following considerations:. The scope of the engagement.. The characteristics of the engagement.. Reporting objectives.. Timing of the audit.. Nature of communications.. Significant factors in directing engagement team efforts.. The results of preliminary engagement activities.. |