Analyses of audit effort, Auditing

Develop a list of tasks the auditor should perform in planning this audit engagement, before any audit testing begins.

Ans:

It is in the interest of both client and auditor that the auditor sends an engagement letter, preferably before the commencement of the engagement, to help in avoiding misunderstanding with respect to the engagement. The engagement letter documents and confirms the auditor's acceptance of the appointment, the objective and scope of the audit, the extent of the auditor's responsibilities to the client and the form of any reports.

The preliminary plan of engagements is documented and prioritized. Audit resources and expertise are then considered and a final plan is presented to senior management and the Audit Committee. The presentations vary based on the needs of the stakeholders and may include the following:

• Summary of key goals, risks and corresponding major audits, to illustrate alignment;

• Analyses of audit effort along a variety of dimensions (e.g., by business segment, COSO objective category, IT, Sarbanes-Oxley, vs. prior year, etc.) along with commentary regarding changes;

• Brief description of critical projects identified;

• Projects requested but not planned for execution due to prioritization and resources;

• Required co-sourcing effort, typically where outside expertise is required or during peak periods;

• Coordination with other risk functions, such as legal, compliance or insurance, to ensure coverage of key organizational risks;

• Update on audit staffing levels, experience and certification; and

• Appendix materials, such as planning approach, assumptions (e.g., days per auditor and staffing level) and brief descriptions of all planned audits and related prioritization.

b) Handbook section CAS 315 lists management assertions embodied in financial statements. List and briefly describe the audit objectives that relate to these assertions.

Posted Date: 3/16/2013 3:51:10 AM | Location : United States







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