Auditing & Assurance Services

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AC 4342 Auditing
Introduction to assurance and financial statement auditing
Discussion Question: Messier Q1-13, 14
1

References
HKICPA Members’ Handbook
Amended Preface to the Hong Kong Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements Hong Kong Framework for Assurance Engagements

Reference
Messier: Ch 1

2

CILOs and TLAs
CILOs
1 Describe the auditing profession, the regulatory, legal and reporting framework of auditing. Recognize the basic principles, objectives and ethical requirements of audit and assurance services. Identify the audit process from client acceptance, design of audit procedures and express an appropriate audit conclusion based on the audit evidence obtained.
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Reliability – Can the information be relied upon to signal the true state of the specific assertion being tested?
14

Summary of management assertions by category
Classes of transactions & events for the period under audit Account balances at period end Presentation and disclosures

Occurrence /Existence Rights and obligations Completeness Accuracy / Valuation and allocation Cutoff Classification

Transactions and events that have been recorded have occurred and pertain to the entity.

Assets, liabilities, and equity interests exist.

Disclosed events, transactions, and other matters have occurred and pertain to the entity. (Occurrence and rights and obligations)

The entity holds or controls the rights to assets, and liabilities are the obligations of the entity. All transactions and events that should have been recorded have been recorded. Amounts and other data relating to recorded transactions and events have been recorded appropriately. All assets, liabilities and equity interests that should have been recorded have been recorded. Assets, liabilities, and equity interests are included in the financial statements at appropriate amounts and any resulting valuation or allocation adjustments are appropriately recorded. All disclosures that should have been included in the financial statements have been included. (Completeness) Financial and other information are disclosed fairly and at appropriate amounts. (Accuracy and Valuation)

Transactions and
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