What is required by ISA 240 at the evaluate and conclude stage of an audit?
ISA 240 requirements are; The auditor shall maintain professional skepticism throughout the audit. Where responses to inquiries of management or those charged with governance are inconsistent, the auditor shall investigate the inconsistencies.
What are the requirements regarding documentation under ISA 330?
ISA 330 requires that the auditor shall always carry out substantive procedures on material items irrespective of the assessed risks of material misstatement, and that the auditor shall design and perform substantive procedures for each material class of transactions, account balance, and disclosure.
Which of the following is not a limitation of audit as per SA 240?
Answer. Answer: It is because of inherent limitation of an audit the practitioner can’t assure the user of f.s.t that the f.s.t are absolutely free from material misstatement.
What do auditing standards require the auditor to consider when assessing the risk of material misstatements in revenue?
What do auditing standards require the auditor to consider when assessing the risk of material misstatements in revenue? assertions related to these transactions, which may increase fraud risk.
What does ISA UK 240 deal with?
This International Standard on Auditing (UK) (ISA (UK)) deals with the auditor’s responsibilities relating to fraud in an audit of financial statements.
How do you test for completeness of revenue?
They can check the completeness of revenue recording in the financial statements by verifying numerical sequence of invoices. When there is a sales increase the accounts receivables analysis should also be done and credit policy should be reviewed.
What is materiality discuss materiality in planning and performing an audit in relations to ISA 320?
ISA 320 require auditor to determine performance materiality for purposes of assessing the risks of material misstatement and determining the nature, timing and extent of further audit procedures. Revise the materiality or set the lower amount if required during any stage of audit.
What is an example of window dressing?
Another variation of window dressing is investing in stocks that do not meet the style of the mutual fund. For example, a precious metals fund might invest in stocks in a hot sector at the time, disguising the fund’s holdings and investing outside the scope of the fund’s investment strategy.
What is misappropriation of cash and goods?
Misappropriation of Cash Theft of cash receipts and petty cash and showing fictitious payment to workers, creditors, purchases, etc. Showing false payments or excess payments in cash book.
What is improper revenue recognition?
Improper timing of revenue recognition occurs when a company inappropriately shifts revenue from one period to another. Most commonly, companies inappropriately accelerate revenue recognition in order to meet their earnings targets.
Which of the following circumstances is most likely to cause an auditor to consider whether a material misstatement exists?
Which of the following circumstances is most likely to cause an auditor to consider whether a material misstatement exists? Transactions selected for testing are not supported by proper documentation.
What criteria might the group engagement team use to identify significant components?
Acceptance and continuance The group engagement team shall obtain at a preliminary stage of a new engagement, or shall update for a continuing one, an understanding of the group, its components and their environments that is sufficient to identify components that are likely to be significant components.
How do you know if revenue is accurate?
The most common way to test accuracy for revenue or sales transaction is to obtain the invoice that was sent to the customer and compare or agree the two pieces of information.
What is the ISA 240?
ISA 240 (Redrafted) defines fraud as: ‘An intentional act by one or more individuals among management, those charged with governance, employees, or third parties, involving the use of deception to obtain an unjust or illegal advantage.
What is TCWG in audit?
a. Those charged with governance means the person(s) with responsibil- ity for overseeing the strategic direction of the entity and obligations related to the accountability of the entity. This includes overseeing the financial reporting process.
What are the factors that may be considered in determining materiality?
Materiality depends on the size and nature of the omission or misstatement judged in the surrounding circumstances. The size or nature of the item, or a combination of both, could be the determining factor. ‘