Guide to Using International Standards on Auditing in - IFAC
Guide to Using International Standards on Auditing in - IFAC Guide to Using International Standards on Auditing in - IFAC
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<str<strong>on</strong>g>Guide</str<strong>on</strong>g> <str<strong>on</strong>g>to</str<strong>on</strong>g> <str<strong>on</strong>g>Us<strong>in</strong>g</str<strong>on</strong>g> <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> <str<strong>on</strong>g>Standards</str<strong>on</strong>g> <strong>on</strong> <strong>Audit<strong>in</strong>g</strong> <strong>in</strong> the Audits of Small- and Medium-Sized Entities Volume 1—Core C<strong>on</strong>cepts<br />
Questi<strong>on</strong><br />
Resp<strong>on</strong>se<br />
Does Each Page<br />
of the Audit<br />
File Need To Be<br />
Initialled and<br />
Dated by the<br />
Preparer and Then<br />
by the Reviewer?<br />
Should ALL<br />
C<strong>on</strong>siderati<strong>on</strong>s<br />
and Use of<br />
Professi<strong>on</strong>al<br />
Judgments Be<br />
Documented?<br />
Are Prelim<strong>in</strong>ary<br />
Drafts of F<strong>in</strong>ancial<br />
Statements<br />
Required To Be<br />
Kept if Materially<br />
Inc<strong>on</strong>sistent with<br />
the F<strong>in</strong>al F<strong>in</strong>ancial<br />
Statements?<br />
Is It Necessary <str<strong>on</strong>g>to</str<strong>on</strong>g><br />
Document N<strong>on</strong>-<br />
Compliance with<br />
ISA Requirements<br />
that Are Really Not<br />
Applicable <str<strong>on</strong>g>to</str<strong>on</strong>g> the<br />
Audit?<br />
• For staff <strong>in</strong>quiries, their names, job designati<strong>on</strong>s, and dates of <strong>in</strong>quiry; and<br />
• For observati<strong>on</strong>s, the process or matter be<strong>in</strong>g observed, relevant <strong>in</strong>dividuals, their<br />
respective resp<strong>on</strong>sibilities, and where/when the observati<strong>on</strong> was carried out.<br />
However, abstracts or copies of the entity’s records (such as significant c<strong>on</strong>tracts and<br />
agreements) may be <strong>in</strong>cluded if c<strong>on</strong>sidered appropriate.<br />
No. The discipl<strong>in</strong>e of <strong>in</strong>itiall<strong>in</strong>g work<strong>in</strong>g papers (as <str<strong>on</strong>g>to</str<strong>on</strong>g> who performed and who<br />
reviewed the audit work) has the effect of hold<strong>in</strong>g the engagement team<br />
accountable. However, this does not mean that each page of the work<strong>in</strong>g paper<br />
file needs <str<strong>on</strong>g>to</str<strong>on</strong>g> be <strong>in</strong>itialled and dated. For example, the evidence of preparati<strong>on</strong> and<br />
review could be <strong>in</strong>dicated for each secti<strong>on</strong>, module or unit <strong>in</strong> the file rather than<br />
the <strong>in</strong>dividual pages. The preparati<strong>on</strong> of work<strong>in</strong>g papers (typically at assistant level)<br />
and their detailed review (typically at the manager level) would <strong>in</strong>volve <strong>in</strong>itiall<strong>in</strong>g<br />
every work<strong>in</strong>g paper secti<strong>on</strong>, module or unit, whereas a general review (at the<br />
partner level) might <strong>in</strong>volve <strong>on</strong>ly look<strong>in</strong>g at key secti<strong>on</strong>s of the file where significant<br />
professi<strong>on</strong>al judgments were made.<br />
No. It is neither necessary nor practicable for the audi<str<strong>on</strong>g>to</str<strong>on</strong>g>r <str<strong>on</strong>g>to</str<strong>on</strong>g> document every matter<br />
c<strong>on</strong>sidered, or professi<strong>on</strong>al judgment made. It is the significant matters and significant<br />
judgments made <strong>on</strong> those matters dur<strong>in</strong>g the audit that need <str<strong>on</strong>g>to</str<strong>on</strong>g> be documented.<br />
Documentati<strong>on</strong> of significant matters and judgments expla<strong>in</strong>s the audi<str<strong>on</strong>g>to</str<strong>on</strong>g>r’s c<strong>on</strong>clusi<strong>on</strong>s,<br />
and re<strong>in</strong>forces the quality of the judgments. This can often be achieved through the<br />
preparati<strong>on</strong> of the significant issues memorandum at the completi<strong>on</strong> of the audit.<br />
No. There is no requirement <str<strong>on</strong>g>to</str<strong>on</strong>g> reta<strong>in</strong> documentati<strong>on</strong> that was <strong>in</strong>correct or<br />
superseded.<br />
No. Other than <strong>in</strong> excepti<strong>on</strong>al circumstances, compliance is required with each ISA<br />
requirement that is “relevant.” An ISA is clearly not relevant when the entire ISA is not<br />
applicable, or when an ISA requirement is c<strong>on</strong>diti<strong>on</strong>al and the c<strong>on</strong>diti<strong>on</strong> does not exist.