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    REVIEW JULY 16, 2024

    Uploaded by

    ALYANAH GAFFAR SARIPADA

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    © All Rights Reserved
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    REVIEW JULY 16, 2024

    Uploaded by

    ALYANAH GAFFAR SARIPADA
    1 views2 pages

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    © © All Rights Reserved

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    1 views2 pages

    REVIEW JULY 16, 2024

    Uploaded by

    ALYANAH GAFFAR SARIPADA

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    AUDITING (JULY 16, 2024)

    35 ITEMS Theory

    35 ITEMS Problems

    Introduction to Assurance Principle

    Assurance- Is like confidence. Providing confidence

    Assurance Engagement- Practitioner provide services. Services provide solution. Banker magpapa-
    utang or hindi. Assurance

    -Definition, objectives, scopes, elements / Philippine Framework for Assurance Engagement (par.7)

    Intended users

    Responsible Party- company

    Financial information – one type

    Investor wants to invest however no expe0rtise so hire practitioner. Subject matter (source of
    information/ wish to obtain information) Subject Matter Information (output or report/outcome
    subject matter against criteria)- financial information. Practitioner get subject matter I compare sa
    GAAP Get financial statement. Examine evidences give conclusion imbedded sa assurance report.
    Users will use it. User will not see all the information so there’s danger, manipulation, can’t access
    information that’s why we need assurance engagement. Audit is only 1 type of audit assurance

    Objective of Assurance Engagement

    Demand for Assurance Services- double check(bias), user is not directly related to operations
    (remoteness), not knowledgeable hire practitioner (complexity), magkamali ng decision because of
    maling information, no access sa data, hire practitioner(information risk), umutang sa bank ask
    audited report have loan (cost of capital)

    Practitioner- perform assurance engagement. Non Assurance Engagement- residual information

    Elements of AE

    - Responsible party- Mngt or company


    - Paghindi nagtogma I gagather niya as evidence
    - Conclusion may be reasonable or limited (Absolute, Reasonable, Limited, No
    Assurance/NAE)

    Three party-

    - Same or different entity


    - Assume company A and Single Person B, Practitioner
    - Middle Mngt
    - Responsible party /intended users
    - Practitioner is broader than auditor
    - PSRE/Philippine Standard Review Engagement
    - If competent siya nga maperform then accept
    - Auditing -expert is auditor or accountant.
    - Responsible Party is the management – finance, engaging party the one hire practitioner or
    not. Intended user can be responsible party. Manager is the engaging party.
    - Written representation- practitioner na tama ang cash. Ibibigay sa party nakalagay yung
    assertions
    - Intended Users- responsible party can be one of the intended users. Investors, public users of
    financial statements. Specific users request that sakanila dapat yung report. CPA has power
    to restrict.
    - Subject Matter: Financial performance- financial statement (combi historical and
    perspective)
    - No- financial- get sales report
    - When is subject matter appropriate? Identifiable and capable of consistent evaluation.
    Evidence is available. To conduct sufficient appropriate evidence.
    - Suitable Criteria- Audit benchmark for account balances. Evidence then conclusion
    - Financial Information PFRS/PAS. Specifically established criteria. Law is the suitable criteria.
    - CR-RUN: Relevance-ex. capacity of bridge, si bridge nay specific tons to enter. Suitable
    criteria is related to the relevance yung critera investment dapat relevant if 2 or more use
    the criteria arrive same output suitable criteria siya.
    - Completeness- assume complete. Kung ako nasa Ph ginamit ko PFRS tas if gumawa nasa
    ibang bansa
    - Established criteria- PFRS, laws and regulations, specifically developed- per entity
    - Professional judgement (hallmark of auditing)- to determine whether sufficient or
    appropriate. Give gut feel because of knowledge and experience
    - Professional skepticism- bakit hindi naka sign? Ask question
    - Sufficient appropriate Evidence: Materiality- check material or not to determine conclusion.
    Helps cpa determine nature, timing and extent of procedures. Audit Engagement. May
    company. Assess ang whole company. 1st identify the company if high or low risk. Bank
    company high risk na audit. High risk possibility na maraming errors so material siya (mataas
    ang materiality mataas procedures). Audit risk – assurance incorrect conclusion. High
    materiality perform more procedures to gather more evidence. Nature of evidences is
    quality , extent is quantity, timing -year end or interim. Assess AE, set up materiality if high
    risk itaas ang materiality. Matter of professional judgement to know if high or low risk.
    - Material Information – if it affects decision making. Materiality- Entity specific one entity is
    different from other entity. Magnitude- 1M material if SME.
    - Company Bank A – identify if high or low risk- AER is low risk na inappropriate yung
    conclusion- low materiality perform more procedures
    - Material/ Pervasive
    - SMI subject Matter Information

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