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Session 3 - QAR Audit Methodology Manual Presentation - Intro To The Manual

The document discusses how an audit system can help improve audit quality and compliance with Philippine Standards on Auditing (PSAs). It describes the benefits of an audit system such as providing structure, improving efficiency, and requiring less time for subsequent audits. The document then outlines what is included in an audit manual designed to guide firms through PSA requirements. The manual contains sections on planning, detailed procedures, and review/completion. It provides example documents, audit programs, and a sample client file to demonstrate the audit process. The document encourages firms to test the system on an audit they know well and involve experienced staff in initial planning and risk assessment.

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Rheneir Mora
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130 views12 pages

Session 3 - QAR Audit Methodology Manual Presentation - Intro To The Manual

The document discusses how an audit system can help improve audit quality and compliance with Philippine Standards on Auditing (PSAs). It describes the benefits of an audit system such as providing structure, improving efficiency, and requiring less time for subsequent audits. The document then outlines what is included in an audit manual designed to guide firms through PSA requirements. The manual contains sections on planning, detailed procedures, and review/completion. It provides example documents, audit programs, and a sample client file to demonstrate the audit process. The document encourages firms to test the system on an audit they know well and involve experienced staff in initial planning and risk assessment.

Uploaded by

Rheneir Mora
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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How an audit system will help with audit

quality and PSA compliance


NOVEMBER 2022
Internationally what is happening?
• Most countries have adopted ISAs
in full, in the Philippines we call it
PSAs, to ensure they have good
quality financial statements
recognized both nationally and
internationally
• Without a proper structured
approach it isn’t possible to carry
out audit work complying with PSAs
Benefits of an Audit System
• Clear structure and documentation of audit work assists in training
new staff
• Better audit efficiency through risk-directed audit work
• After the first audits using the system on subsequent audits will take less
time as staff become more familiar with it
Benefits of using an audit programme
• Provides
• Structured audit approach
• File organisation
• Audit area work programmes with tests showing assertions covered
• Firms with specialist audit areas can insert additional schedules
The Audit Manual
• It is a resource intended for use by all audit firms
• Designed to guide firms through the requirements of the ISAs
• May need to add extra sections for specialised audits
How has the manual been designed?
• Originally designed by a
specialist supplier for use in the
UK but has been tailored to
remove UK only requirements:
• Designed for use by small and
medium sized audit firms
• Fully compliant with Philippine
Standards on Auditing (PSA)
• Fully compliant with the Code of
Ethics for Professional
Accountants in the Philippines
It is designed for the audit of standalone,
small and medium sized audit clients
• The Manual is for use by smaller firms which carry out audits on
uncomplicated clients. All unnecessary complications have been
removed, so:
• It is not specific to local GAAP reporting, so no disclosure checklist is included
• Audit programs do not include any ‘local’ legislative requirements
• The Manual assumes that firms carry out straight forward audit testing - there
is no expectation that firms will use detailed substantive analytical procedures
to provide audit evidence and there are no tests of controls
• There is no consolidation work program - the Manual is designed for firms
working on standalone, small and medium sized audit clients
What is in the audit manual? (1 of 3)
• The Manual has three sections:
• Planning and control
• Detailed procedures
• Review and completion
• All sections contain example documents
• The Manual also includes “file dividers” to provide structure to the audit
file and allow for evidence of review of each section
• The Detailed Procedures are made up of uncomplicated audit programs -
these are PSA compliant without being too demanding
What is in the audit manual? (2 of 3)
• It contains more than 100 pages of information covering PSA
requirements and guidance on how the system complies with these
• It is Word/Excel based and can be completed on screen or in print
• It has a Permanent file which is used for recording key information on
the client. This is part of the audit file – there is a checklist in the
planning section which links the Current Year Audit file and the
Permanent file
What is in the audit manual? (3 of 3)
• It has a documents folder, which includes example documentation such as
engagement letters, debtors circularization letters and bank confirmation
letters
• It provides a set of working papers for an example audit client (Mann of
Moorgate). This includes complete planning and finalization sections, as
well as some example fieldwork sections
Practical hints and tips
• Try out the audit system first on a larger audit that you know well
• Appropriately experienced staff should complete the initial planning
and risk assessment
• Permanent files, planning and risk assessment will need time from
both you and the client - aim to do some work before the client’s
year end
Questions

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