RSM323H1 Chapter Notes - Chapter 5: Financial Audit, Audit Risk, Engagement Letter
Document Summary
Determining auditability: the auditor must determine, through discussions with the prospective auditee"s management personnel, whether the organization is auditable. , determining whether the financial statements will be presented in accordance with. In a first-time audit, it may be based on a predecessor auditor"s experience or on general experience with similar companies: interim audit work covers procedures performed several weeks or months before the. Industry characteristics also affect business risks: auditors are expected to use integrative reasoning to draw together many complex and rapidly changing factors in reaching their conclusions. Use an organized apporach: preliminary analytical procedures can provide considerable familiarity with the auditee"s business. If income is used, it should be adjusted for abnormal or extraordinary items. Materiality judgment criteria qualitative: user related factors, nature of the item or issue, circumstances. Summary of materiality levels in the auditing standards. Documenting the overall audit strategy and audit plan.
