ACADEMY OF FINANCE
ASSURANCE 1
Chapter 3
Process of assurance:
Planning the assignment
Lecturer: Dang Thi Huong,
PhD, CPA , Valuer, ICAEW BFP.
Email: dxthanhhuong@[Link]
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Chapter 3
3.1. 3.2. 3.3. 3.4. AUDIT
PLANNING ANALYTICAL
3.5. FRAUD
MATERIALITY RISK
PROCEDURES
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PLANNING
kế hoạch chiến lược
general thôi
kế hoạch kiểm toán chi tiết hơn bản chất, tg thực hiện và mức độ thực hiện
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Planning
ĐẢM BẢO PHÂN BỔ NGUỒN LỰC HỢP LÍ CHO NHỮNG KHU VỰC QTRONG TRONG CIỘC KIỂM TOÁN
XÁC ĐỊNH DC NHỮNG VDE CÓ THỂ PHÁT SINH TRONG CUỘC KIỂM TOÁN
đảm bảo cuộc kiểm toán dc tổ chức và hiẹu quả
tạo dk cho team members có định hướng kiểm toán phù hợp
hỗ trợ cho việc review
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A structure approach to planning
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The overall audit strategy
• Identifying the relevant characteristics of the engagement, such
as the reporting framework
• Discovering key dates formức reporting and other communications
trọng yếu, đánh giá rủi ro ban đầu
• Determining materiality, preliminary risk assessment, whether
internal controls are to be tested
khi nào thì thực hiện thủ tục kiểm toán
• Consideration of when work is to be carried out, for example
before or after the year end, for example: interim audit;
kiểm kê kiẻm toán bán niên/ kiểm toán giứa niên độ-> k đưa ra bckt -> chỉ rà soát
counting, etc
• Consideration of 'team members' available, their skills and how
and when they are to be used, for example particular skills for
high risk areas. In addition, appropriate levels of staff are
required to facilitate direction, supervision and review of more
junior team members„ work kiến thức kinh nghiệm trình độ của các team member
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Key contents of an overall audit strategy
thu thập sự hiểu biết về mt hđ của kh
(1) Understanding the entity’s environment
• General economic factors and industry conditions
những đặc trưng qtrong của kh : giấy phép dki kdoanh, kqua kd trong những năm gần đây
• Important characteristics of the client: (a) business, (b) principal
business strategies, (c) financial performance, (d) reporting
requirements, including changes since the previous audit
• The general level of competence of management năng lực của nhà quản li đơn vị
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Key contents of an overall audit strategy
tìm hiểu về hệ thống kt và hệ thống ksoat nb của đơn vị
(2) Understanding the accounting and internal control system
+ The accounting policies adopted by the entity and changes in
those policies
+ The effect of new accounting or auditing pronouncements
+ The auditors' cumulative knowledge of the accounting and
internal control systems, and the relative emphasis expected to
be placed on different types of test.
hệ thống ksoat nb của đơn vị có 5 thành phần
- control envi
- risk ass
- control acti
- information and communication
-monitoring
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Key contents of an overall audit strategy
(3) Risk and materiality
The expected assessments of risks of fraud or error and
identification of significant audit
thiết lập mức trọng yếu
areas
• The setting of materiality for audit planning purposes
• The possibility of material misstatements, including the
experience of past periods, or fraud
• The identification of complex accounting areas including those
involving estimates.
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Key contents of an overall audit strategy
xđ tg bản chất của các thủ tục
(4) Consequent, nature, timing and kvucextent
ktoan cụ thể
of procedures
• Possible change of emphasis on specific audit areas
• The effect of information technology on the audit
(5) Coordination, direction, supervision and review
• The number of locations
• Staffing requirements
• Need to attend client premises for inventory count or other
year-end procedures.
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Key contents of an overall audit strategy
Interactive question 1: The overall audit strategy
Which three of the following would ordinarily be contained in the
overall audit strategy?
A. The contract between the audit firm and the client
B. The results of audit risk assessment
C. Calculation of preliminary materiality
D. Detailed plan of audit procedures to be carried out plan
E. List of staff to be involved with the audit
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Understanding the entity & its environment
pvan nhà ql đơn vị
phân tích
quan sát kiểm tra physical - tài liệu / document - chứng từ
kn kiểm toán của kì trc
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Analytical procedures
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Analytical procedures
*Analytical procedures: Evaluations of financial
information through analysis of plausible relationships
among both financial and non-financial data.
* Analytical procedures also encompass such
investigation as is necessary of identified fluctuations or
relationships that are inconsistent with other relevant
information or that differ from expected values by a
significant amount.
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According to ISA 520:
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vốn của đơn vị hiệu quả sd vốn
AP IN PLANNING
OF THE AUDIT
chỉ tiêu đòn bẩy
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Materiality
Materiality: An expression of the relative significance or
importance of a particular matter in the context of financial
statements as a whole mức trọng yếu thực hiện -> thấp hơn mức trọng yếu tổng thể ban đầu
Performance materiality: The amount or amounts set by the
auditor at less than materiality for the financial statements as a
whole to reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected misstatements exceeds
materiality for the financial statements as a whole.
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Materiality
Materiality assessment will help the auditors to decide:
• how many and what items to examine
• whether to use sampling techniques
• what level of misstatement is likely to lead to an auditor to say
the financial statements do not give a true and fair view
Tolerable misstatement is the maximum misstatement that an
auditor is prepared to accept in a class of transactions or balances
in the financial statements
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Audit risk
In the risk-based approach, auditors analyse the risks associated
with the client's business, transactions and systems which could acceptable adit risk
IR CR
lead to misstatements in the financial statements, and direct AAR = IR X CR DR
PDR = AAR/ (IR X CR)
their testing to risky areas. PDR -> PLAN DETECTION
RISK = RỦI RO PHÁT HIỆN
• Audit risk: The risk that the auditor expresses an inappropriate DỰ KIẾN
audit opinion when the financial statements are materially
misstated.
• Audit risk is a function of the risks of material misstatement and
detection risk
AR= IR* CR* DR
= Risks of material misstatement + Detection risk
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Audit risk
Inherent risk: The susceptibility of an assertion about a class of
transaction, account balance or disclosure to a misstatement that
could be material, either individually or when aggregated with
other misstatements, before consideration of any related controls.
Control risk: The risk that a misstatement that could occur in an
assertion about a class of transaction, account balance or
disclosure and that could be material, either individually or when
aggregated with other misstatements, will not be prevented, or
detected and corrected, on a timely basis by the entity's internal
control.
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Audit risk
Detection risk: The risk that the procedures performed by the
auditor to reduce audit risk to an acceptably low level will not
detect a misstatement that exists and that could be material,
either individually or when aggregated with other misstatements.
ISA 200 says: “The auditor shall obtain sufficient appropriate
audit evidence to reduce audit risk to an acceptably low level
and thereby enable the auditor to draw reasonable conclusions
on which to base the auditor's opinion.”
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Worked example: Audit risk 1
Inherent and control risk were both high. This has the following
effects on the audit.
• The auditors are unlikely to rely on tests of controls, but will
carry out extended tests of details
• Detection risk must be rendered low, which will mean carrying
out a substantial number of tests of details.
-> BẢN CHẤT KD CỦA ĐƠN VỊ PHỨC TẠP , KIỂM SOÁT NB CỦA DN YẾU -> K TIN TƯỞNG HỆ THỐG KSNB ->
K THHỰC HIỆN TOC -. THHỰC HIỆN SUBSSANTIVE PROCEDURES
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Worked example: Audit risk 2
As control risk is low, the auditors are likely to carry out tests
of controls and seek to rely on the client's system. This does
not mean substantive procedures can be eliminated entirely.
- > THẤP -> KHẢ NĂNG CAO TIN CẬY VÀO HỆ THỐNG KSNB -> CÓ THỂ SDUNG TOC -> SDUNG TOC MÀ CR K THẤP NHƯ KÌ VỌNG -> TOD
Detection risk in this instance would be affected by the
amount of tests of controls and tests of details carried out.
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Significant risks
ISA 315 sets out the following factors which indicate that a risk may
be a significant risk:
• Risk of fraud
• Related to recent significant economic, accounting or other
development
• The complexity of the transaction
• It is a significant transaction with a related party
• The degree of subjectivity in the financial information
• It is an unusual transaction
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Fraud and Error
Fraud Error
An intentional act An unintentional
involving the use of misstatement
deception to obtain an the omission of an
unjust or illegal amount or a
advantage. disclosure.
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Fraud
There are two types of fraud:
• Fraudulent financial reporting involves intentional
misstatements, including omissions of amounts or disclosures in
financial statements, to deceive financial statement users.
• Misappropriation of assets involves the theft of an entity's
assets and is often perpetrated by employees in relatively small
and immaterial amounts.
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Fraud
Responsibilities in relation to fraud
+ The company's management is responsible for preventing and
detecting both fraud and error.
+ The auditor is responsible for obtaining reasonable assurance that
the financial statements are free from material misstatement,
whether caused by fraud or error
Material misstatements from fraud are at greater risk of not being
detected than material misstatements from error
fraud may involve sophisticated schemes designed to conceal it
• fraud may be perpetrated by individuals in collusion
• management fraud is harder to detect because management is
in a position to manipulate accounting records or override
control procedures.
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