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Audit Regulatory Environment

The document outlines the audit regulatory environment, detailing the audit process in five key stages: acceptance and continuance, risk assessment and audit planning, evidence collection, audit procedures, and audit reporting, each governed by specific International Standards on Auditing (ISA). It also mentions additional series related to review engagements, prospective financial information audits, and agreed-upon procedures, emphasizing the importance of maintaining audit quality. Overall, the document serves as a comprehensive guide to the standards and procedures necessary for conducting audits effectively.

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2 views

Audit Regulatory Environment

The document outlines the audit regulatory environment, detailing the audit process in five key stages: acceptance and continuance, risk assessment and audit planning, evidence collection, audit procedures, and audit reporting, each governed by specific International Standards on Auditing (ISA). It also mentions additional series related to review engagements, prospective financial information audits, and agreed-upon procedures, emphasizing the importance of maintaining audit quality. Overall, the document serves as a comprehensive guide to the standards and procedures necessary for conducting audits effectively.

Uploaded by

David logan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Audit Regulatory Environment

Audit Process
1. Acceptance and Continuance (Determining whether to accept a new audit or continue with
existing audit engagement)
o 200 Series (Standards related to general audit principles)
 ISA 200: Defines the overall objective of conducting an audit in compliance with
International Standards on Auditing (ISA).
 ISA 210: Covers agreeing on the terms and conditions of the audit with the
client.
 ISA 230: audit documentation
2. Risk Assessment and Audit Planning (identifies potential risks and develops a detailed plan to
address them during the audit process.)
o ISA 300: Establishes guidelines for effective audit planning
o ISA 315: identifying and assessing risks by analyzing the entity and its environment.
o ISA 320: Defines materiality levels to determine the significance of financial
misstatements.
3. Evidence Collection (Gathering sufficient and appropriate audit evidence)
o ISA 500: Ensures that audit evidence is both sufficient (quantity) and appropriate
(quality).
o ISA 530: Covers audit sampling techniques to draw reliable conclusions.
o ISA 520: Discusses analytical procedures used to assess financial data trends and
relationships.
4. Audit Procedures (Performing specific tests and methods to verify financial accuracy)
o ISA 600: Provides guidelines for auditing financial statements of group entities.
o ISA 610: Defines how external auditors can use the work of internal auditors to improve
efficiency.
o ISA 620: Covers the use of experts when specialized knowledge is required in an audit.
5. Audit Report (Communicating audit findings and opinions , whether the financial statements are
free from material misstatements)
o ISA 700: The objective of auditor’s opinion on financial statements.
o ISA 710: Highlights key audit matters that are important for stakeholders.
o ISA 706: Discusses emphasis of matter and other matter paragraphs for additional
disclosures.
o ISA 705: Provides guidelines for issuing a modified audit report when necessary.
(Modified report with modified opinion)

Additional Notes
 2000 Series: Covers review engagements, where auditors provide limited assurance.
 ISAE 3400: Deals with prospective financial information audits.
 4400 Series: Covers agreed-upon procedures, where specific procedures are performed as per
client needs.
 ISQC 1: Focuses on maintaining audit quality and ensuring compliance with standards.

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