Audit AssistantThe concept of understanding an entity’s business model, including how it uses Information Technology (IT) is new in ISA 315 (Revised 2019). Understanding the business model sounds like child’s play, but in the context of exploring inherent risks, it presents a powerful tool to understand the entity. Paragraph 19(a)(i) tells us that: The auditor shall perform […]
Read moreRemember CAATs? This was an acronym for Computer Assisted Audit Tools – a general category for all things computery that helped us work with more efficiency and power. Now that virtually all we do uses a computer, ISA 315 (Revised 2019) does not refer to CAATs but to Automated Tools and Techniques (ATTs). This kind […]
Read moreThere’s a new Act in town. And some people aren’t happy, claiming that this could be an ‘extinction event’ for many small clubs. The 1908 Act was predictably relaxed, out of step with modern regulation and reporting, so an update was needed. So what does the new Incorporated Societies Act entail for these entities, and […]
Read moreDoes your firm administer any family trusts? Then you will no doubt be aware of the increased requirements under the Trusts Act 2019 for ensuring all the data about the Trust is up to date. To help achieve this, we have, in collaboration with a large local Accountancy firm, developed a simple questionnaire to be […]
Read moreThe 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.
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