audit completion stage Flashcards
What is the importance of the completion stage of an audit?
It is crucial as it involves reviewing the evidence obtained and the final version of the financial statements to form the auditor’s opinion.
What does ISA 220 require regarding audit work?
All audit work should be subject to review to ensure that sufficient appropriate audit evidence has been obtained.
What does ISA 230 require for audit documentation?
Documentation should include who reviewed the audit work, the date, and extent of the review.
What is the purpose of ISA 450 during the audit file review?
To evaluate the effect of identified misstatements on the audit and the effect of uncorrected misstatements on the financial statements.
What must be done with all misstatements identified during the audit according to ISA 450?
All misstatements (other than clearly trivial ones) must be accumulated, communicated to management, and corrected.
How should the auditor handle uncorrected misstatements?
The auditor must reassess materiality, determine if the misstatements are material individually or in aggregate, and communicate them to those charged with governance.
What is required from management regarding uncorrected misstatements?
Management must provide a written representation regarding whether they believe the effects of uncorrected misstatements are immaterial, both individually and in aggregate.
What does ISA 520 require for final analytical procedures?
Analytical procedures should be performed near the end of the audit to assist in forming an overall conclusion on the consistency of the financial statements with the auditor’s understanding of the entity.
What should the auditor do if final analytical procedures reveal further risks of material misstatement?
The auditor must revise the assessed risk of material misstatement and modify the planned audit procedures accordingly.
What should the auditor review at the completion stage according to ISA 520?
The main elements of the financial statements, the notes to the financial statements, and any other information issued with the financial statements.
What is the purpose of ISA 560, Subsequent Events?
To ensure that all events occurring between the date of the financial statements and the auditor’s report that require adjustment or disclosure have been identified.
What does ISA 570, Going Concern, require from the auditor?
The auditor must remain alert for evidence that may cast doubt on the entity’s ability to continue as a going concern and review the final version of the financial statements accordingly.
What is the significance of ISA 580, Written Representations?
Written representations are necessary audit evidence and must be dated as close as possible to the auditor’s report date. They cover all subsequent events up to the date of the audit report.
What should be communicated to those charged with governance according to ISA 260?
Significant findings from the audit, matters relating to auditor’s independence, and whether two-way communication was effective.
What is typically discussed during the audit clearance meeting?
The adequacy of internal controls, proposed adjustments to financial statements, audit difficulties, ethical matters, written representations, changes in regulations, and appropriateness of accounting policies.
