ISA 500 - Audit Evidence

In this article, Steve Collings looks at ISA 500 which has been redrafted as part of the IAASB’s ‘Clarity Project’ and considers what constitutes audit evidence and how such evidence should be recorded in an audit file.

ISA 500 stipulates what constitutes audit evidence and lays down the guidance which auditors are required to follow in the design and performance of audit procedures which will allow sufficient appropriate audit evidence to be gathered to give reasonable assurance that the financial statements do not contain a material misstatement. The phrase ‘reasonable assurance’ is a crucial aspect of the auditor’s report because…

ISA 230 (revised) Audit Documentation

In the first of a series of articles, Steve Collings takes a look at the revised and/or redrafted auditing standards issued by the IAASB during the ‘clarity project’.  The IAASB clarity project is aimed at removing ambiguity within the auditing standards and clarifying certain terms within the standards themselves.  The first ISA in the series looks at ISA 230 (revised) Audit Documentation.

Audit work, whether it be discussion, observance, reperformance etc. must be documented within the audit file.  Whilst this may seem obvious to any auditor, it is surprising just how much audit work is undertaken by audit firms that…

Sampling Techniques in Audit

Students dealing with auditing papers will have to gain an understanding of the different types of testing which can be applied by auditors.  Audit sampling is dealt with under ISA 530 (redrafted) ‘Audit Sampling’ .  This article looks at the different types of audit testing an auditor can apply.

The definition of audit sampling in ISA 530 is:

“the application of audit procedures to less than 100% of items within a class of transactions or account balance such that all sampling units have a chance of selection”.

Illustration

Cosmos has reported trade receivables in the statement of financial…

The Importance of Audit Planning

This article takes a look at a vitally important aspect of an auditor’s work which is that of the planning of the audit.  Students studying ACCA F8 and P7 will benefit from the contents of this article.

An efficient and effective audit can only be performed if the audit has been thoroughly and properly planned.  The importance of audit planning cannot be over emphasised and ISA 300 (redrafted) ‘Planning an Audit of Financial Statements’ contains the provisions which the auditor is required to comply with in planning an audit.

In summary, ISA 300 says that the planning stage of the…

Help From Steve in Audit Papers

Student studying auditing will be faced with challenging papers.  They are a challenge because if students do not work in audit, or if they have never come across the principles involved in audit, the papers can be particularly overwhelming.

This article considers some of the ‘tips’ students studying audit papers should take on board to help them prepare for their exam.

Principles of audit

The first thing students need to understand when studying for audit papers is WHY the audit is undertaken in the first place.  Is it true auditors are there to check up on the finance staff?

The…