SA 500 Series

Question 1

Procedures to obtain AE

Answer 1

Risk assessment procedure
Compliance procedure
Substantive procedure

Question 2

Methods to obtain AE

Answer 2

• Re calculation
• Reperformance
• Inquiry
• External Confirmation
• Analytical Procedures (Observation+ Inspection)

Question 3

Reliability of evidence

Answer 3

1- Reliabilty increased - obtained from independent sources outside entity.
2- If AE generated internally is reliability increased when related controls are effective.
3- AE obtained directly by the auditor more reliable than AE obtained indirectly.
4- AE in documentary from more reliable than evidence obtained orally.
5- AE provided by original documents more reliable than by photocopies or facsimiles.

Question 4

Info used as AE prepared using work of mgt expert

Answer 4

1- Evaluate competence, capabilities & objectivity of expert
2- Obtain understanding of work of expert
3- Evaluate appropriateness of expert’s work as AE

Question 5

Meaning of AE

Answer 5

Info used by auditor in arriving at conclusions on which auditor’s opinion is based. It includes both info contained in A/C records & other informationm

Question 6

SA 550- Related Parties
Objective

Answer 6

In forming an opinion auditor shall evaluate -
1- Identified RP relationships & transactions appropriately accounted for & disclosed in accordance with the applicable FRF

2- Whether effects of the RP relationships & transactions prevent the FS from achieving true and fair presentation; or cause the FS to be misleading.