Guide to Using International Standards on Auditing in - IFAC

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114 <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.
115 10. Further Audit Procedures Chapter Content Relevant ISAs The characteristics and use of further audit procedures. 330, 505, 520 Exhibit 10.0-1 Further Audit Procedures Substantive procedures Tests of control Tests of detail Substantive analytical Paragraph # Relevant Extracts from ISAs 330.4 For purposes of the ISAs, the following terms have the meanings attributed below: (a) Substantive procedure—An audit procedure designed <strong>to</strong> detect material misstatements at the assertion level. Substantive procedures comprise: (i) Tests of details (of classes of transactions, account balances, and disclosures); and (ii) Substantive analytical procedures. (b) Tests of controls—An audit procedure designed <strong>to</strong> evaluate the operating effectiveness of controls in preventing, or detecting and correcting, material misstatements at the assertion level.
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Guide to Using International Standards on Auditing in - IFAC

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