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AAA: M2 PLANNING THE AUDIT HISTORICAL FINANCIAL INFORMATION - Coggle…
AAA: M2 PLANNING THE AUDIT
HISTORICAL FINANCIAL INFORMATION
2.1 Objectives of an an audit
of financial statement
Overarching purpose
Audit risk
Legal, regulatory, professional and ethical requirements
Regulatory environment
Quality control for audit
Engagement team members compliance
with ethical requirements
Acceptance and continuance
of client relationship
Assignment of engagement team
Engagement performance
Auditor independence
for the audit of FS
Auditor independence and United States Legislation
Compliance with independence requirements
Auditor and audit firm rotation
Audit firm rotation
Auditor independence for the audit of SMEs
Physical conduct
of ethics
Matters Concerning Professional Appointments for Auditors
Applying professional
skepticism and judgment
Detecting material misstatement
2.2 Terms of engagement
Precondition
Engagement term and letter
of engagement
Changes to term
2.3 Audit planning procedure
Guidance materials for planning an audit of SMEs
Overall audit strategy
Audit plan
Financial statement assertion
Documentation
Materiality
Application of
materiality
concepts
Identifying risk of material misstatement
Overall vs Performance materiality
Susceptibility of entity financial statement to
material misstatement - team meeting
Phases of audit
2.4 Understanding entity and
its environment
The entity industry, regulatory and
other external factors
Industry condition
Regulatory environment
Other external factors
Nature of entity
Business operation
Entity business model
Investment
Financing
The entity selection and application of accounting policies
The entity objective, strategies and related business risk
Measurement and review of entity financial performance
2.5 The entity's internal control
Components of internal control
Control environment
Entity risk assessment process
Information system and communication
Control activties
Monitoring of control
Internal control in SMEs
Control in IT environment
Types of control
General IT controls
Application controls
Input control
Proper authorization
Accurate conversion
Completeness of data