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
Typical audit documentation would include the items listed below.
Exhibit 16.4-1
Risk Assessment Phase
• Pre-engagement (client acceptance) procedures.
• Independence and ethics assessments.
• Terms of engagement.
• Materiality considerations.
• Overall audit strategy.
• Audit team discussions, including possible causes of material
misstatement due <strong>to</strong> fraud.
• Risk assessment procedures performed, and the results.
• Assessed risks of material misstatement identified (at overall and
assertion levels), based on the understanding of the entity obtained and
related internal control (if any).
• Significant risks.
• Communications with management and those charged with governance.
Comments
Remember <strong>to</strong> update
risk assessment
documentation for:
• Any new risks
identified later in the
audit; and
• Changes needed in
risk assessments or
materiality identified
as a result of
performing further
audit procedures.
Risk Response
Paragraph #
Relevant Extracts from ISAs
230.9 In documenting the nature, timing and extent of audit procedures performed, the audi<strong>to</strong>r shall record:
(a) The identifying characteristics of the specific items or matters tested; (Ref: Para. A12)
(b) Who performed the audit work and the date such work was completed; and
(c) Who reviewed the audit work performed and the date and extent of such review. (Ref: Para. A13)
240.45 The audi<strong>to</strong>r shall include the following in the audit documentation of the audi<strong>to</strong>r’s responses
<strong>to</strong> the assessed risks of material misstatement required by ISA 330:
(a) The overall responses <strong>to</strong> the assessed risks of material misstatement due <strong>to</strong> fraud at the
financial statement level and the nature, timing and extent of audit procedures, and the
linkage of those procedures with the assessed risks of material misstatement due <strong>to</strong> fraud
at the assertion level; and
(b) The results of the audit procedures, including those designed <strong>to</strong> address the risk of
management override of controls.
330.28 The audi<strong>to</strong>r shall include in the audit documentation:
(a) The overall responses <strong>to</strong> address the assessed risks of material misstatement at the
financial statement level, and the nature, timing, and extent of the further audit
procedures performed;
(b) The linkage of those procedures with the assessed risks at the assertion level; and
(c) The results of the audit procedures, including the conclusions where these are not
otherwise clear. (Ref: Para. A63)
330.30 The audi<strong>to</strong>rs’ documentation shall demonstrate that the financial statements agree or
reconcile with the underlying accounting records.