Auditing Review
92When audit risk is at an appropriately low level
83The possibility that the auditors may unknowingly fail to appropriately modify their opinion on financial statements that are materially misstated
49Investigate the identities and reputations of the client’s directors, officers, and major stockholders
51The reputation of management
81The company’s financial strength and credit rating.
85Make inquiries of the client’s banker, legal counsel, and predecessor auditor.
26Determine that independence requirements are met.
16Communicate on matters such as management integrity
18Disagreements with management
29Communications with the audit committee
24The reason for the change of auditors.
74Review of working papers related to opening balances and the consistency of application of accounting principles.
7,79 Study relationships among financial and nonfinancial data to identify areas that may represent higher risks.
32Evaluate difficult- to- audit transactions or balances
20Complex calculations
28Difficult accounting issues.
78Significant judgment by management.
90Valuations that vary significantly based on economic factors.
TYPES OF FINANCIAL STATEMENT ASSERTIONS
34Existence
60Occurrence
75Rights
54Obligations
19Completeness
2Accuracy
89Valuation
6Allocation
68Presentation
30Disclosure
24Cutoff
MATERIAL MISSTATEMENT DUE TO FRAUD/WAYS TO IDENTFY FRAUD RISK
31Discussions with engagement personnel
42Inquiries of management and others within the organization
7analytical procedures
37fraud risk factors.
OVERALL RESPONSES TO RISKS
59Obtain more reliable evidence in support of specific financial statement items
57Obtain additional corroboration of management’s explanations or representations
8Assign additional staff with specialized skill and knowledge
9Assign more experienced staff to the engagement
4Adjust the extent of the supervision of the audit staff
38Further consider management’s selection and application of
83The possibility that the auditors may unknowingly fail to appropriately modify their opinion on financial statements that are materially misstated
49Investigate the identities and reputations of the client’s directors, officers, and major stockholders
51The reputation of management
81The company’s financial strength and credit rating.
85Make inquiries of the client’s banker, legal counsel, and predecessor auditor.
26Determine that independence requirements are met.
16Communicate on matters such as management integrity
18Disagreements with management
29Communications with the audit committee
24The reason for the change of auditors.
74Review of working papers related to opening balances and the consistency of application of accounting principles.
7,79 Study relationships among financial and nonfinancial data to identify areas that may represent higher risks.
32Evaluate difficult- to- audit transactions or balances
20Complex calculations
28Difficult accounting issues.
78Significant judgment by management.
90Valuations that vary significantly based on economic factors.
TYPES OF FINANCIAL STATEMENT ASSERTIONS
34Existence
60Occurrence
75Rights
54Obligations
19Completeness
2Accuracy
89Valuation
6Allocation
68Presentation
30Disclosure
24Cutoff
MATERIAL MISSTATEMENT DUE TO FRAUD/WAYS TO IDENTFY FRAUD RISK
31Discussions with engagement personnel
42Inquiries of management and others within the organization
7analytical procedures
37fraud risk factors.
OVERALL RESPONSES TO RISKS
59Obtain more reliable evidence in support of specific financial statement items
57Obtain additional corroboration of management’s explanations or representations
8Assign additional staff with specialized skill and knowledge
9Assign more experienced staff to the engagement
4Adjust the extent of the supervision of the audit staff
38Further consider management’s selection and application of