Guide to Using International Standards on Auditing in - IFAC

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<strong>Guide</strong> <strong>to</strong> <strong>Using</strong> <strong>International</strong> <strong>Standards</strong> on Auditing in the Audits of Small- and Medium-Sized Entities Volume 1—Core Concepts
In some situations, there can be some advantages <strong>to</strong> performing audit procedures before the period end. For
example:
• Helping <strong>to</strong> identify significant matters at an early stage. This provides time for the issues <strong>to</strong> be addressed
and further audit procedures <strong>to</strong> be performed;
• Balancing the audit firm’s workload by shifting some busy-season procedures <strong>to</strong> a period when there is
more time;
• Balancing the client’s workload by reducing the time required after the period end <strong>to</strong> answer audit
inquiries and provide requested evidence and schedules; and
• Performing procedures unannounced or at unpredictable times.
The following exhibit outlines the fac<strong>to</strong>rs <strong>to</strong> consider when determining whether <strong>to</strong> perform procedures at an
interim date.
Exhibit 9.3-3
Audit Procedures
Performed Before
the Period End
Fac<strong>to</strong>rs <strong>to</strong> Consider
How good is the overall control environment? Counting inven<strong>to</strong>ry at an interim date
and then updating the count for movements (in and out) is unlikely <strong>to</strong> be enough if
the control environment is poor.
How good are the specific controls over the account balance or class of transactions
being considered?
Is the required evidence available <strong>to</strong> perform the test? Electronic files may
subsequently be overwritten, or procedures <strong>to</strong> be observed may occur only at certain
times.
Would a procedure before the period end address the nature and substance of the
risk involved?
Would the interim procedure address the period or date <strong>to</strong> which the audit evidence
relates?
How much additional evidence will be required for the remaining period between
the date of procedure and the period end?
Volume 1, Chapter 10.5 provides further information on the timing of tests of controls.
After Period End
Certain audit procedures can be performed only at, or after, the period end. This would include cu<strong>to</strong>ff procedures
(where there is minimal reliance on internal control), period-end adjustments, and subsequent events.