The standard as amended will be effective for audits of financial statements for fiscal years ending on or after December 15, 2020.See PCAOB Release No.SEC Release No. 34-86270.View the standard as amended here.
Accordingly, the engagement partner is responsible for planning the audit and may seek assistance from appropriate engagement team members in fulfilling this responsibility. Engagement team members who assist the engagement partner with audit planning also should comply with the relevant requirements in this standard. ![]() Planning is not a discrete phase of an audit but, rather, a continual and iterative process that might begin shortly after (or in connection with) the completion of the previous audit and continues until the completion of the current audit. When developing the audit strategy and audit plan, as discussed in paragraphs.08-.10, the auditor should evaluate whether the following matters are important to the companys financial statements and internal control over financial reporting and, if so, how they will affect the auditors procedures. Additionally, some larger, complex companies may have less complex units or processes. Factors that might indicate less complex operations include: fewer business lines; less complex business processes and financial reporting systems; more centralized accounting functions; extensive involvement by senior management in the day-to-day activities of the business; and fewer levels of management, each with a wide span of control. This includes determining the locations or business units at which to perform audit procedures, as well as the nature, timing, and extent of the procedures to be performed at those individual locations or business units. The auditor should assess the risks of material misstatement to the consolidated financial statements associated with the location or business unit and correlate the amount of audit attention devoted to the location or business unit with the degree of risk of material misstatement associated with that location or business unit. AS 2605 and AS 2201 establish requirements regarding using the work of internal audit and others, respectively. However, for an initial audit, the auditor should determine the additional planning activities necessary to establish an appropriate audit strategy and audit plan, including determining the audit procedures necessary to obtain sufficient appropriate audit evidence regarding the opening balances. AS 1110, Relationship of Auditing Standards to Quality Control Standards, explains how the quality control standards relate to the conduct of audits. Public Company Accounting Oversight Board and PCAOB are registered trademarks of the Public Company Accounting Oversight Board.
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