Audit AssistantThe next concept, expressed in paragraph 8 of ISA 315, is a reminder that our audit work must be framed in terms of responses to risks of material misstatement (RoMM). This is not new, but it is critical to making our audit file “sing”. The first part of paragraph 8 states that “ISA 330 requires […]
Read moreLet’s face it, auditing can be like herding cats. There are so many factors that must be considered simultaneously that it’s really impossible to proceed through anything but the most basic job without new facts emerging, new risks surfacing, and expectations changing. We try to nail this down and not miss anything, with our programmes […]
Read moreThe fourth concept recognised in the new ISA 315 (paragraph 5) builds on the emphasis on inherent risk (IR) discussed in the last article and the need for a separate assessment of inherent risk and control risk. ISA 200 tells us that inherent risk is higher for some assertions and related classes of transactions, account […]
Read moreRoMM at the more granular (assertion) level may be split into Inherent Risk (IR) and Control Risk (CR). These are familiar concepts but the new standard formulates these and makes them much more specific, which is a good thing.
Read moreThese should be familiar concepts to auditors, however, familiarity does not mean that the concepts are easy to learn or maintain.
Read moreAudit risk sounds simple at first glance but can quickly turn nasty once we start trying to define and understand how it actually works.
Read moreFrom January 2022 the thresholds at which New Zealand financial reporting requirements are allowed, and to the levels under which audits and review engagements are required, have been updated. Let’s consider New Zealand’s reporting landscape while considering the changes. A variety of reporting levels Think of the reporting framework as a tree with two main […]
Read moreWhy a new standard? A wide range of stakeholders use Agreed-Upon Procedure (AUP) reports for various reasons. The demand for AUP engagements continues to grow, particularly with the need for increased accountability around funding and grants. In addition, regulation changes have also driven increased demand for AUP engagements, especially from smaller entities, as increased audit […]
Read moreWhy there is a need for yet another quality standard? PES 4 supports PES 3 in that it specifically addresses the Engagement Quality Reviewer; their appointment, eligibility, responsibilities, and documentation. PES 4 (the NZ version of ISQM 2) aims to strengthen the requirements for engagements that should be subject to an engagement quality review by […]
Read moreThe IAASB has now issued its proposed standard on less complex entities (ED-ISA for LCE) for feedback. A standard around LCE’s is long overdue, and their proposal comes with the hope of easing unnecessary requirements placed on auditors. The standard is expected to come into effect around 2023/2024 and should be a game-changer for the […]
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