Audit firms often use checklists throughout the audit process. These checklists
ID: 2587507 • Letter: A
Question
Audit firms often use checklists throughout the audit process. These checklists provide a baseline of what needs to be performed and/or asked for each example, the checklist may specify the types of questions or what evidence needs to be obtained to properly sample, evaluate, and document the results. These checklists help ensure that the requirements of guidance are considered and met Auditors will then complete these checklists by answering each question or staterment ate area. For For each question or statement listed below, delermine whether it would most kely be included or excluded from the audit strategy checkilist. Include or Exclude? Statement or Question 1. Will the audit involve specialists? If so, please include the specialist(s) that may be involved as well as the expected extent on involvement 2. Has management agreed to the preliminary materiality amount? 3. Does the entity utilize service organizations? If so, please include the service organizations utilized by the entity 4. Document the deadlines for interim and final reporting 5. Were non-responses to accounts receivable confirmations followed up with a 2nd confirmation request? 6. Did the inventory appear to be obsolete? 7. Document the proliminary evaluation of materiality 8. Will the auit utilize the client's internal auditor's for direct assistance? If so, to what extent? 9 Does the work performed on deferred credits support the conclusion about the audit area? 10. Document the areas where there is a higher risk of material misstatement 11. Was the management representation letter obtained? 12. Document, if any, additional regulatory reporting requirements that the entity must adhere toExplanation / Answer
Statement No.
Include/ exclude
Reason
1
Include
Specialists are required in audit for specific areas such as high risk matters and complex matters.
2
Exclude
In all material aspects, the auditor’s belief that the financial statements taken as whole are not materially misstated.
3
Include
Audit planning will be done as per the work structure of service organizations.
4
Include
It will make the control on the audit planning so that it can be completed within stipulated time.
5
Include
Third Party confirmation is an important part of audit to check the actual standings of accounts receivables.
6
Include
Inventory should be classified as per the usage so that the obsolete inventory can not affect the financials.
7
Include
In all material aspects, the auditor’s belief that the financial statements taken as whole are not materially misstated.
8
Include
It helps to understand the entity and its environment and assessing the risks of material misstatements.
9
Include
The auditor shall document the nature and basis of deferred credit because it is a kind of reserve.
10
Include
These are the most important areas which needs special analysis with the help of specialist for that area.
11
Include
This letter is the final step in the audit process. In this letter management of the organization acknowledges that the financial statements are the responsibility of the management.
12
Include
The auditor should be well versed with the all regularities applicable to the organizations so that the auditor can check those regulations.
Statement No.
Include/ exclude
Reason
1
Include
Specialists are required in audit for specific areas such as high risk matters and complex matters.
2
Exclude
In all material aspects, the auditor’s belief that the financial statements taken as whole are not materially misstated.
3
Include
Audit planning will be done as per the work structure of service organizations.
4
Include
It will make the control on the audit planning so that it can be completed within stipulated time.
5
Include
Third Party confirmation is an important part of audit to check the actual standings of accounts receivables.
6
Include
Inventory should be classified as per the usage so that the obsolete inventory can not affect the financials.
7
Include
In all material aspects, the auditor’s belief that the financial statements taken as whole are not materially misstated.
8
Include
It helps to understand the entity and its environment and assessing the risks of material misstatements.
9
Include
The auditor shall document the nature and basis of deferred credit because it is a kind of reserve.
10
Include
These are the most important areas which needs special analysis with the help of specialist for that area.
11
Include
This letter is the final step in the audit process. In this letter management of the organization acknowledges that the financial statements are the responsibility of the management.
12
Include
The auditor should be well versed with the all regularities applicable to the organizations so that the auditor can check those regulations.
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