Auditing Bits in Bytes Session 2: Preliminary Planning Activities (17W618-13)
Description
Auditing Bits in Bytes™ is a series of eight individual sessions that
guides professionals through the complete audit process from “A to Z” –
starting with Pre-Engagement Planning Activities, and going all the way
through Wrap-up and Quality Control. The auditing profession is
undergoing the most significant changes in modern history. Think about
it. The Auditing Standards Board issued 14 new Statements on Auditing
Standards all effective within two years of each other, the GAO revised
Government Auditing Standards (twice!) in 2007, the PCAOB has six
additional Auditing Standards related to audits of SEC “issuers” that
directly influenced standards established for “non-issuers”,
independence rules promulgated by all relevant standard setters have
been clarified and enhanced, and Statements on Quality Control Standards
for firms performing attestation services have also been revamped and
strengthened. Whew! That is a lot! And to think that professionals
complained about being confused before all these changes occurred!! All
professionals, both those that are new to performing financial statement
audits and those with previous experience, can benefit from focused
training that walks participants through the complete audit process from
“A to Z”, providing practical tips and best practices for ensuring an
effective and efficient financial statement audit in compliance with
relevant professional and regulatory standards.
Learning Objectives
Session 2 of this eight-part series focuses on the initial information
that is gathered and important conclusions that are reached at the
on-set of engagement planning and the performance of certain risk
assessment procedures
This phase of the engagement sets the stage for
how much effort will be invested in evaluating the design and
implementation of internal controls (which is covered in Session 3 of
this series)
Key professional judgments made at this stage provide the
foundation and rationale for risk assessment conclusions that are
ultimately used to design the nature, timing and extent of further audit
procedures (which is covered in Session 4 of this series)
One of the
most important learning points that participants will take away from
this session will be the recognition that these preliminary activities
are not just "check off the box" tasks, but are critical to early
judgment calls about risk of material misstatement (which directly
influences the audit effectiveness and efficiency)
Major Topics
Gaining an Understanding of the Entity & Environment - What should be
documented and how it relates to identifying areas of higher risk of
material misstatement
Materiality & Tolerable Misstatement - How these
are not just rote calculations on a standard form, but important and key
decisions that set the stage for conclusions throughout the entire audit
Preliminary Analytic Procedures - Why this analysis assists the
auditor in identifying significant audit areas and "what could go wrong"
in the client's financial statements due to fraud or error
Fraud Risk
Considerations - Common peer review deficiencies identified related to
these important required procedures
Identifying Significant Audit
Areas - How to identify significant accounts, classes or transactions
and disclosures, and what that means to further risk assessment
procedures
