ACCA P7 - Evidence and Audit procedures

1 Analytical procedures

The evaluation of financial information through analysis of plausible relationships among both financial and non-financial data and investigation of identified fluctuations, inconsistent relationships or amounts that differ from expected values. (ISA520)

• 纵向比较：与过去和预算比较
• 横向比较：与同行业规模类似的企业比较
• 关系：考虑信息之间的关系

1.2 Limitation

• The nature of business
• Reliable predicted relationship
• The reliability, independence and relevance of the available information
• Cost effectiveness
• The degree of past experience and knowledge of the business
• The availability of other types of evidence

1.3 Use of APs

• At the planning stage (mandatory)
  to gain understanding of the client business and focus the audit on areas at risk of misstatement
• As a substantive procedures
  to get audit evidence
• At the final stage (mandatory)
  as part of the overall review of FS

1.4 Steps

• Obtain an understanding of the business
• Choose and predict data, ratios and statistics exist which are significant for the business
• Compare what?
• Seek explanations for any variance and corroborate those explanations

1.5 Methods

• Comparison of one year with another
• Trend analysis (regression analysis)
• Ratio analysis
  • Profitability (Gross profit margin/Net profit margin)
  • Solvency (Gearing/Interest cover)
  • Liquidity (Current ratio/Quick ratio/Working capital)
  • Return (Return on capital/ROCE)
• Reasonable test (proof in total)

1.6 一般答题思路

• Calculation
• Description
• Explanation & Analysis
• Further information 可能对结论带来的影响

2 Evidence

2.1 相关准则

相关准则

2.2 Requirements for audit evidence (ISA550)

• Sufficient (Quantity)
• Appropriate (Quality or Reliability)

2.3 Management assertion（管理层认定）

(ISA312.25) To provide a basis for designing and performing further audit procedures, the auditor shall identify and assess the risks of material misstatement at:

• FS level
• Assertion level for classes of transactions, account balances and disclosures

财报即是管理层认定的总结

管理层认定的内容

Transaction & Events ➡️ SOFP
Account Balances ➡️ PnL

2.4 Audit procedures

2.4.1 Audit process

计划阶段：了解企业及其经营环境，识别和评估风险
执行阶段：设计和执行审计程序，获取充分恰当的审计证据
完成和复核阶段：得出审计意见，复核审计工作，形成审计报告

审计工作流程

2.4.2 Types of Audit procedures

• Inspection of assets
• Inspection of documentation
• Observation
• Enquiries
• Confirmation
• Recalculations
• Reperformance
• Analytical procedures

使用哪些审计程序是审计人员的一项职业判断(judgement)，通常依据的是对control risk的评估。内控好，风险低，通过控制测试证明内控有效，此时可用分析性程序和询问；相反，多用实质性程序和其他方法。

2.5 Audit Sampling (ISA530)

• Sampling risk - 检查总体和样本所得出的结论不一致，该风险随着样本量增大而下降
• Non-sampling risk - 与样本容量无关的因素导致得出错误结论的风险

2.6 Written representations 管理层声明书 (ISA580)

The auditor may require confirmations from directors that have provided information as required by laws and regulations as well as the agreed terms of the audit engagement. （声明提供的信息符合法律法规和审计约定书中的要求）

• 何时需要

  • When facts are confined to management - 证据只能从管理层得来
  • When it it s a matter of opinion or judgement - 信息涉及管理层的意见或判断

• 如果管理层拒绝提供声明书，而审计人员觉得是必要的
  insufficient / inappropriate audit evidence，属于审计范围受限，出具保留except for或无法表示意见disclaimer of opinion。

• 如果是contradictory evidence
  调查情况并重新考虑管理层声明书的可靠性。

• 如果提供的管理层声明书不足以构成充分恰当的审计证据

  • 审计师应当通过企业内部外部渠道，获取相佐证的corroborative审计证据
  • 评估是否WR合理，并与其他审计证据相一致
  • 考虑提供管理层声明书的人是否了解相关的事项所涉及到的信息

管理层声明书虽然是一个审计证据，但其有效性不高，特别是涉嫌舞弊时。所以有时会从治理层governance获取声明书。

2.7 Audit documentation (ISA230.8)

2.7.1 Requirements of audit documentation

The auditor shall prepare audit documentation that is sufficient to enable an experienced auditor, having no previous connection with the audit, to understand:

• Nature, timing and extent of audit procedures to comply with ISAs
• The results of the audit procedures performed, and the evidence obtained
• Significant matters arising during the audit, the conclusions reached thereon, and significant professional judgements made in reaching those conclusions

2.7.2 Reasons of audit documentation

Provide evidence for

• work done
• if litigation

2.8 Using the work of an auditor's expert (ISA620)

2.8.1 概念区分

• Auditor's expert - 获取专家工作以获取审计证据
  • auditor's internal expert 审计项目组的成员
  • auditor's external expert
• Management's expert -获取专家工作以编制财报

2.8.2 利用专家工作前

• 评估专家
  professional competence, capabilities, objectivity, cost/benefit basis (written as part of the engagement letter)

• 就专家工作的nature, scope, objectives of the expert's work达成一致意见，适当时以书面形式加以体现 (ISA620.11)

  • Objectives and scope of the expert's work
  • A general outline as to the specific matters the expert's report covered
  • Intended use of the expert's work
  • The extent of the expert's access to records and files
  • Clarification of the expert's relationship with the entity
  • Confidentiality of the entity's information
  • Information regarding the assumptions and methods intended to be used by the expert and their consistency with those used in prior periods

2.8.3 利用专家工作中

• 评估专家工作的适当性adequate，包括专家的finding和conclusion的相关性和合理性 (ISA620.12)

  
  
  专家工作相关性和合理性的考虑因素

• 如果not adequate (ISA620.13)

  
  
  审计师在专家工作不恰当时的操作

2.8.4 利用专家工作后 (ISA620.14)

审计报告中不需要提及利用了专家的工作，因为审计报告是审计师的责任。

利用专家工作后需注意1

利用专家工作后需注意2

2.9 Using the work of internal auditors (ISA610)

2.9.1 利用内审工作时

利用内审工作时需考虑的因素

2.9.2 利用内审工作的方式

• Planning stage
  • obtain information to be used when assessing risk of material misstatement
• Performing stage
  • to use auditor's work instead of performing audit procedures
  • to use internal auditors themselves to perform audit procedures (direct assistance)

Direct Assistance

• 利用内审Direct assistance前

  1. Written agreement must be obtained

     • from an authorized representative of the entity
     • from the internal auditors

  2. Auditor需考虑

     • The amount of judgement involved
     • Risk of material misstatement
     • The external auditor's evaluation of threats to the objectivity an the level of competence of the internal auditors

• 以下情形禁止引入direct assistance
  

  禁止内审人员直接帮助的情形

2.9.3 利用内审工作的步骤 Steps when relying on internal audit

• Discuss the the planned use of internal audit work with the internal audit function
• Read the relevant internal audit reports to understand the nature and extent of audit procedures performed and the findings
• Carry out and document 'sufficient audit procedures' on the internal audit work to be used to assess its adequacy for the purposes of the audit

2.10 Related parties (ISA550)

Parties that are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions.

IAS24 Related Party Disclosure requires entities to disclose:

• Related party relationships where control exists
• Transactions with these and other related parties

2.10.1 审计师和管理层关于关联方交易的责任划分 (ISA550)

The auditor has an obligation to ensure the appropriate identification, accounting and disclosure of related party relationships and transactions.

• Management responsibility
  identify and disclose related party relationships and transactions
• Auditor's responsibility
  review the information provided by management and be alert for other material related party transactions

2.10.2 关联方交易的审计方法（具体查什么，目的是什么）

关联方交易的审计方法1

关联方交易的审计方法2