Identify the different phases of an audit

Assignment Help Auditing

Reference no: EM132368728

Topic - Risk Assessment

On completing the learning activities associated with this topic you should be able to:

1. Identify the different phases of an audit.

2. Identify the process used in gaining an understanding of the client.

3. Explain the going concern assumption.

4. Evaluate fraud risk and going concern assumption.

5. Evaluate how a client's information technology can affect risk.

Reading guide - References: Moroney, Campbell and Hamilton, Chapter 3.

Standards:

ASA 300: Planning an Audit of a Financial Report.

ASA 240: The Auditor's Responsibilities Relating to Fraud in an Audit of a Financial Report.

ASA 315: Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and its Environment.

ASA 550: Related Parties

ASA 570: Going Concern

Review questions:

1. Explain the importance of the risk assessment phase of a financial report audit.

2. List and explain the key factors that the auditor would consider during preliminary risk assessment.

3. Explain the differences between (1) incentives and pressures, (2) Opportunity and (3) attitudes and rationalisation in the context of fraud. Why is it important for an auditor to consider the client systems relevant to all three concepts?

4. Do only listed companies have good corporate governance? Explain.

5. Why does an auditor need to understand a client's IT system? Explain how IT affects the financial report.

6. What does it mean when we say that a business is a 'going concern' or alternatively, has going concern issues? Why must an auditor specifically consider evidence about the going concern assessment for each client?

7. What is a related party? Why is an auditor interested in identifying related parties during the risk assessment phase of an audit?

Reference no: EM132368728

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