MODULE 15

Question 1

Planning helps the auditor reduce risk,

How else does it help the auditor?

Answer 1

Ensures sufficient and appropriate attention is directed to important areas
Helps to ensure potential problems are identified and resolved early
Helps to complete work efficiently and effectively
Helps to facilitate the direction and supervision of the Audit

Question 2

What aspects of the Entity should the auditor understand?

Answer 2

1. The industry, regulations and external factors
2. Nature of the entity
3. The accounting policies in place
4. Their Objectives and strategies
5. Measurement and review of the their financial performance
6. Their Internal controls

Question 3

What techniques could the auditor use to understand the entity>

Answer 3

Analytical Procedures
Enquiry ( Asking question)
Inspection
Observation

Question 4

What are the two types of fraud?

Answer 4

Fraudulent Financial reporting

Misappropriation of assets

Question 5

Fraud risks can be categorised into 3 categories:

Answer 5

Incentives or Pressures
Opportunities
Rationalisations

Question 6

What are audit Data Analytics?

Answer 6

They way we can discover and analyse patterns, deviations and inconsistencies in data

Question 7

What are the 5 steps an Auditor should consider when using ADA’s in the Audit Process:

Answer 7

1. Consider overall objective
2. Obtain and Cleanse the data (put it in the format we need it in)
3. Consider whether the data is relevant and reliable
   Carry out ADA technique
   Evaluate and report on the results of the ADA