Completion of Audit

Question 1

When is the Completion Process?

Answer 1

• @ the end after fieldwork has been completed & the draft financial statements have been received
• Last Step before Planning

Question 2

Why the Completion Process?

Answer 2

• To ensure adequate & appropriate audit evidence is obtained to justify an opinion and limit risk
• To form an opinion on the reasonable presentation of financial statements
• Be able to report

Question 3

Who is responsible?

Answer 3

Staff with necessary experience & skills to demonstrate professional judgement

Question 4

Audit Completion

Step 1

Answer 4

Evaluate sufficiency & appropriateness of audit evidence

Question 5

Reliability

What is the source of Audit Evidence?

Answer 5

• External audit evidence obtained directly by auditor is better than the internally generated evidence
• Internally generated evidence is MORE reliable when internal controls are functioning efficiently
• Audit evidence directly obtained by Auditor is MORE reliable than evidence from supplier

Question 6

Reliability

What is the nature of Audit Evidence?

Answer 6

• Written evidence is BETTER than Oral representations
• Original documents are MORE reliable than evidence via fax

Question 7

Step 2

Answer 7

Evaluation of misstatements identified during period

Question 8

Consider materiality of audit differences

What is the nature of differences?

Answer 8

• Differences & identified misrepresentations
• Uncertainties & probable misstatements

Question 9

Consider materiality of audit differences

What are non-material differences?

Answer 9

• Report to management
• Consider whether cumulative effect is NOT sufficient

Question 10

Consider materiality of audit differences

What is significant differences?

Answer 10

Request client to edit financial statements

Question 11

Consider materiality of audit differences

Is there a significant difference? Yes

Answer 11

Set up a unqualified audit report

Question 12

Consider materiality of audit differences

Is there a significant difference? No

Answer 12

Set up a qualified audit report

Question 13

Step 3

Answer 13

Overall review of financial statements

Question 14

What should be considered with respect to the presentation of the financial statements?

Answer 14

• Applicability of accounting policies in accordance with IFRS
• Compliance with Basic Amounting concepts
• Financial position & Results of Operations
• Presentation & Disclosure:
  
  • Complies with IFRS
  • Statutory requirements & regulations

Question 15

Step 4

Answer 15

Consider whether liabilities exceed assets & going concern

Question 16

Step 5

Answer 16

Post-balance sheet events

Question 17

Step 6

Answer 17

Conclusion & reporting

Question 18

Conslusion of Step 6

Answer 18

• Consult Audit Opinion on the financial statements
• Compare draft statements with the financial statements

Question 19

Who do you report to?

Answer 19

• To shareholders
• To management

Question 20

Step 7

Answer 20

Reflection

Question 21

Step 1

Sufficient audit evidence

Answer 21

• Reduce audit risk to an acceptable level
• The higher QUALITY of evidence, the less evidence is needed
• Justify an opinion on a reasonable version of statements