CA Audit

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Created by
Daisy Olivia

Subdecks (2)

Cards (859)

  • Professional scepticism
    attitude
  • Professional judgement

    A skill
  • Professional scepticism and professional judgement are closely linked concepts, and both are required in planning and performing audit engagements
  • Professional scepticism should be exercised throughout the audit, and the use of professional scepticsm should be documented in the audit work papers
  • Professional scepticism is a necessary in supporting high-quality professional judgement and audit quality
  • Aspects of an audit where professional scepticism is particularly important

    • Evaluating accounting estimates
    • Fraud - for example when considering the possibility of management override of controls
    • Going concern – for example when evaluating management's plans for future actions in relation to its going concern assumption and whether these plans are feasible
    • Related party relationships and transactions – for example when remaining alert for information that may indicate previously unidentiØed or undisclosed related party relationships or transactions
    • Consideration of laws and regulations
    • Auditing signiØcant unusual or highly complex transactions
    • Evaluating the assumptions, methodologies and outputs of AI tools to focus on the risks related to AI such as overreliance and bias
  • Characteristics of professional scepticism

    • Inquiring mind (R120.5 of the Code of Ethics for Professional Accountants)
    • Questioning mind
    • Suspension of judgement
    • Search for knowledge
    • Interpersonal understanding
    • Autonomy
  • Audit evidence contradicts other audit evidence obtained

    Could indicate fraud
  • Information brings into question the reliability of documents and responses to enquiries to be used as audit evidence

    Could indicate inaccurate reporting
  • Conditions that may indicate fraud

    Journals posted and approved by the same person
  • Circumstances suggest the need for audit procedures beyond those required by auditing standards

    Engage a specialist to assess management's accounting position paper