Robust Audit Planning Part II – Highlights of Technical Clinic
In Part 1 of this two-part series, published in IS Chartered Accountant, May 2015 issue, we emphasised that planning is imperative to the effective conduct of an audit engagement and issuance of appropriate audit opinion. It is a critical, if not the most critical, process of the entire audit cycle. In this second part, we will highlight some of the planning activities public accountants (PAs) should engage their auditees and their staff in. This list is by no means exhaustive, but it would serve to dispel some common misconceptions about audit planning.
Audit of Accounting Estimates – Highlights of Technical Clinic
Accounting estimates have always been intriguing to the stakeholders on how the amounts were derived, perplexing to the management on how to come up with the amounts, and challenging to the auditors on how to audit the amounts. In the absence of precise means of measurement, accounting estimates conveniently become an area that is susceptible to management’s bias. Here are the highlights of the discussion.
Analytical Procedures – Highlights of Technical Clinic
Analytical procedures are an important part of an audit process and consist of evaluations of financial information through analysis of plausible relationships among financial and non-financial data. Rick Chan, Partner, Head of Technical and Training, Mazars LLP, facilitated this topic for a group of practitioners at ISCA’s monthly technical clinic. Here are the highlights of the discussion.
It is not practical for the auditor to test 100% of the population within an account balance. Therefore, the auditor applies audit sampling in the selection of samples to obtain audit evidence from that account balance. Wee Kong Eng, Partner of K E Wee & Associates, shared insights on this topic with a group of practitioners and we bring you the highlights here.
The completion stage of the audit is of great importance. It is at this stage of the audit that the auditor summarises all the work performed in order for the engagement partner to conclude that sufficient appropriate audit evidence has been obtained in all material aspects to support the audit opinion. John Lim, Partner of PKF-CAP LLP facilitated this topic to a group of practitioners. The key areas discussed are presented here.
Robust Audit Planning Part I – Highlights of Technical Clinic
Rachel was a young and self-motivated audit assistant who joined a 15-headcount Small and Medium-sized Practice (SMP) three months ago. She completed two audit engagements under the guidance of an audit senior, which gave her a great sense of accomplishment. In that three-month period, Rachel had also completed the ISCA Practical Audit Workshop (PAW) which gave her morale another boost. She was grateful to her audit partner for the training opportunity and looked forward to applying her newlyacquired knowledge on the next audit engagement. To her delight, her audit manager assigned to her an audit engagement which was, in the words of the manager, “more challenging than her past two engagements”. She felt valued and told herself that she would give it her best shot.
The going concern assumption is a fundamental principle in the preparation of financial statements, and the appropriateness of its use is a matter for the auditor to consider on every audit engagement. Singapore Financial Reporting Standard (FRS) 1 requires that management assess the entity's ability to continue as a going concern, whereas Singapore Standard on Auditing (SSA) 570 requires the auditor to evaluate management's assessment and the adequacy of disclosures. Ng Kian Hui, Partner of BDO LLP, facilitated the topic "Going Concern" for a group of practitioners in one of ISCA's monthly Technical Clinics. The main highlights of the discussion are shared here.
Audit of accounts payable (AP) remains an area where common and repeated findings are highlighted at the Practice Monitoring Programme (PMP). What are the areas to look out for in the audit of AP? Wong Sook Yee, an experienced consultant, facilitated this topic at a technical clinic for a group of practitioners on September 20. Here are the highlights of the discussion.
An audit needs to be properly planned before the detailed audit work begins. Adequate audit planning helps to ensure that adequate resources are allocated to important areas of the audit and that potential problems are identified on a timely basis. Mona Low, Managing Partner of Low Yap & Associates, facilitated this topic at a technical clinic for a group of practitioners.
Auditors are appointed to provide an independent opinion to shareholders on the true and fairness of an entity’s annual financial statements. An audit opinion can be unmodified or modified depending on whether the auditor is able to conclude, based on the audit evidence gathered during the course of the audit, if the financial statements as a whole are free from material misstatement. Michael Chin, Managing Partner of PKF-CAP LLP, facilitated this interesting discussion topic among a group of practitioners.