Comparing The Proposed New Audit2

CAS 300 requires auditors to their audit using a risk based model where the nature, timing and extent of audit procedures are based on the assessed risk of material misstatement. Pickett (2006) argues that for audits to be effective and efficient, much of the audit effort should be focused on areas that are considered to pose the highest audit risk. Additional audit procedures should be linked to individual audit assertions whereas other audit procedures need to be performed as and when needed. Thus, for an audit plan to be put in place, it is necessary for an auditor to come up with a risk profile of the client comprising an understanding of the business operating by the audit client, assess business risk and also perform its preliminary analytical review.

The auditor must review disclosures for adequacy, and if the auditor concludes that information disclosures are not reasonably adequate, the auditor must state so in the auditor’s

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate (Louwers & Reynolds, 2007). We believe that the audit evidence obtained is sufficient and appropriate to provide a reasonable basis for our opinions.

Exceptions can be approved by the Board and are made in cases where the revenue paid for such services contributes less than 5% of revenues paid to the auditing firm. Also, a public accounting firm may provide these non-audit services along with audit services if it is pre-approved by the audit committee of the public company. The audit committee will disclose to investors in periodic reports its decision to approve the performance of non-audit services and audit services by the same accounting firm. This requirement to disclose to investors is likely to inhibit auditing committees from approving the performance of auditing and non-auditing services by the same accounting firm. Other sections outline audit partner rotations, accounting firm reporting procedures, and executive officer independence. Specifically, subsection 206 states that the CEO, Controller, CFO, Chief Accounting Officer or similarly positioned employees cannot have been employed by the company's audit firm for one year prior to the audit.

The current Canadian Auditing Standard [CAS] 610 has an exposure draft that is being reviewed currently to replace

An important decision for any shareholder is deciding whether or not to do business with that company. When a business is audited, the operations are reviewed to make sure that nothing is being hidden. An auditor will review the company’s financial statement and practices to confirm that each are direct and correct. The financial statements are the business’s way of representing them and showing that they are following the Generally Accepted Accounting Principles. The audit process is an important one because it provides a platform for the auditor’s opinion concerning the financial statements of the company. As part of the audit process the auditor will conduct an audit plan that outlines a number of actions that he or she will be perform while also detailing the reason for those actions. With every audit, the business’s management is in charge of handing over the financial statements that the auditor will review; while the auditor will review the statements for any material or immaterial misstatements.

A review and an audit report are both a form of an attestation engagement. A Review, however, is less in scope so it provides a moderate level of assurance on the financial statements. It is considered a “sniff” of an audit, which comparatively provides reasonable assurance that no material misstatements occurred. Since a review deals with a limited scope, it does not provide the basis for expressing an opinion on the presentation of the

The government and accounting professionals have been focusing on accounting policy and procedures since the Enron, WorldCom, and Tyco financial scandals occurred. These financial scandals occurred by company executives and public accounting companies who failed to disclose and account for the known fraud (Casabona & Grego, 2003, p. 16). Due to these financial accounting scandals the Auditing Standards Board (ASB) of the AICPA established Statement on Auditing Standards (SAS), in addition to the requirements made by SOX and the PCAOB, to hold companies and auditors accountable for financial statement reporting (p. 16).

The Auditing Standards Board (ASB) redrafted the standards for clarity and reorganized all of the auditing sections (AU) into new one adding C after (AU-C), bringing both significant and subtle changes. For some of the standards only the format changed but others significantly impacted the auditor’s work. This project was very important for the globalization

Due to increasing economic and financial growth, many types of audit have been incorporated throughout the development process of internal activities. Audits can be performed manually or they can incorporate technology. According to Hunton and

Section I. The Auditor’s Report With Regard to the Auditor’s Report............................................................................................... II. General Audit Procedures With Regard to Client Acceptance .................................................................................................. With Regard to Client Understanding ............................................................................................. With Regard to Audit Planning

3. a synthesis phase where the finding from material balances are translated into a waste reduction action plan.

The opinion of the above author also supported by ISA Section 560 paragraphs 18. It stated that when management does not take the necessary steps to ensure that anyone in receipt of the previously issued financial statements together with the auditor’s report thereon is informed of the situation and does not revise the financial statements in circumstances where the auditor believes they need to be revised, the auditor would notify those charged with governance of the entity that action will be taken by the auditor to prevent future reliance on the auditor’s report. The action taken will depend on the auditor’s legal rights and obligations and recommendations of the auditor’s lawyers.

This article initiates with the introduction on what is audit planning. It basically addresses the audit plan strategy of K & S Corporation limited’s Financial Statements. Being an external auditor of the company, key factors to be considered in auditing the financials of the subject company have been discussed in the article. The most significant accounts at risk being materially misstated have been critically examined citing the possible risks associated with such accounts. Last but not the least, the article concludes with recommendations with respect to audit assessment plan of the company. Hence, this article seeks to act as a ready reckoner guide for an audit manager in audit planning of K & S Corporation Limited.

"Practice of Internal Auditing Standards" of the internal audit made a clear definition: Internal auditing is an independent, objective assurance and consulting activity designed to add value for the organization and improve the operational efficiency of organizations. It uses a systematic, disciplined approach to evaluate and improve risk management, control and governance processes to help organizations achieve their goals (SPIRA, L. F. & PAGE, M. 2003).