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(AAS) 3

DOCUMENTATION Harinderjit Singh

NIRC //ICAI NIRC ICAI

9.7.2005 9.7.2005

DOCUMENTATION (AAS 3)

OVERVIEW

Introduction

Form and content


Ownership and Custody of Working Papers Exposure Draft on Revised (AAS) 3 - Audit Documentation

NIRC / ICAI

9.7.2005

DOCUMENTATION (AAS 3)

INTRODUCTION

Document evidence that audit carried out in accordance with basic principles (AAS2) Documentation refers to working papers prepared or obtained by auditor Working papers aid in : Planning and performance of audit Supervision and review of audit work Providing evidence of audit work performed
NIRC / ICAI 9.7.2005

DOCUMENTATION (AAS 3)

FORM AND CONTENT

Working Paper to record:

audit plan,

nature, timing & extent of audit procedures

conclusions drawn from evidence obtained

NIRC / ICAI

9.7.2005

DOCUMENTATION (AAS 3)

FORM AND CONTENT

Form & content affected by : nature of engagement form of auditors report nature & complexity of clients business

nature & conditions of clients records & degree of reliance on internal controls
need in particular circumstances for direction, supervision and review of work performed by assistants
NIRC / ICAI 9.7.2005

DOCUMENTATION (AAS 3)

FORM AND CONTENT

Standardisation of working papers (e.g. checklists, specimen letters, standard organisation of working papers) Working Paper sufficiently complete and detailed Significant matters together with auditors conclusion thereon Ensure working papers obtained from client properly prepared Permanent & current audit files (PAF & CAF)
NIRC / ICAI 9.7.2005

DOCUMENTATION (AAS 3)

FORM AND CONTENT - PAF

PAF includes

Legal & organisational structure of entity


Legal documents & agreements Study & evaluation of internal controls

Audited F/S for PYs


Significant ratios & trends Management letters, if any Significant accounting policies Significant audit observations of earlier years.
NIRC / ICAI 9.7.2005

DOCUMENTATION (AAS 3)

FORM AND CONTENT - PAF

CAF includes:

Acceptance of annual reappointment


Board & general meetings minutes Nature, timing & extent of audit proceduresreview Audit matters communicated/discussed with client including terms of engagement etc. Representation letters Significant aspects of audit Experts / third party FS & related audit report
NIRC / ICAI 9.7.2005

DOCUMENTATION (AAS 3)

OWNERSHIP AND CUSTODY OF WORKING PAPERS

Working Papers Property of auditor Extracts of working papers available to client at auditors discretion. Reasonable procedures for custody & confidentiality of working papers Retention of working papers
NIRC / ICAI 9.7.2005

EXPOSURE DRAFT REVISED (AAS) 3 AUDIT DOCUMENTATION SALIENT MATTERS

Caption changed from Documentation to Audit Documentation Fallout of Enron Changes to Audit Documentation New concept of Experienced Auditor Identification of Prepares & Reviewer Retention period - 10 years vis--vis 8 years prescribed by Companies Act
NIRC / ICAI 9.7.2005

(AAS) 6 (REVISED)
RISK ASSESSMENT AND INTERNAL CONTROL

NIRC /ICAI
NIRC / ICAI

9.7.2005
9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Overview

Introduction

Inherent Risk
Accounting & Internal Control Systems

Control Risk
Detection Risk

Audit Risk in Small Business


Communication of Weaknesses
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Introduction

Understanding of accounting & internal control system and audit risk Sufficient to plan & develop an effective audit approach Professional judgment to assess audit risk & design audit procedures Applicability 1.4.2002
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Introduction Certain terminologies:

Inappropriate opinion
Inherent Risk Control risk Detection risk Control environment Control procedures Internal Control System Accounting System
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Inherent Risk

Relate inherent risk assessment to material account balance & classes of transactions in developing audit program. High inherent risk assessments are made taking into account factors relevant both to F/S as a whole & to specific assertions. Reasons for assessing inherent risk as not high should be documented.

NIRC / ICAI

9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Assessing Inherent Risk

Factors for Evaluation

At Level of F/S
integrity of management management experience & knowledge & changes in management during period unusual pressures on management

nature of entitys business


factors affecting industry in which entity operates.
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Assessing Inherent Risk

At Level of Account Balance & Class of Transactions quality of accounting system F/S susceptible to misstatement

complexity of transactions & events


degree of judgement susceptibility of assets to loss or misappropriation unusual & complex transactions at or near period end transactions not subject to ordinary processing
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Inherent Limitations of Internal Controls

Reasonable but not absolute assurance Control be cost effective Addressing unusual transactions

Human error
Collusion by employees & third parties Management overriding control Manipulation in estimates & judgments in FS.
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Understanding Accounting & Internal Control Systems

CAKE inquiries of appropriate level of personnel inspection of documents & records observation of activities & operation

NIRC / ICAI

9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Accounting Systems - Understanding

major classes of transactions how such transactions initiated significant accounting records, supporting

documents & specific accounts


accounting & financial reporting process - initiation to inclusion in FS

NIRC / ICAI

9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Control Environment - Understanding

Managements attitudes, awareness & actions regarding internal controls & their importance in entity.

NIRC / ICAI

9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Control Risk

Preliminary Assessment of Control Risk At assertion level for each material account balance or class of transaction.

NIRC / ICAI

9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Control Risk

Preliminary Assessment of Control Risk

Control risk assessed at high level for some or all assertions where accounting & internal controls not effective or evaluating not efficient.
Preliminary assessment of control risk for a FS assertion high unless: internal controls identified tests of control to support assessment planned
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Control Risk Documentation of Understanding & Assessment of Control Risk Document : understanding of entitys accounting & internal control system; assessment of control risk.

When control risk assessed at less than high, document basis.


Different techniques for documentation: narrative questionnaires checklists flow charts
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Control Risk

Tests of Control Audit evidence re. effectiveness of accounting & internal control system & operation of controls

throughout period.

NIRC / ICAI

9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Control Risk

Tests of Control

Tests of control may include:


inspection of documents for controls re.authorisation inquiries & observation of controls which have no audit trail testing computerized application or overall IT function Lower assessments of control risk more audit evidence should be obtained
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Control Risk

Tests of Control

Considering effectiveness of controls:


How applied? Consistency on application during period By whom applied? Deviations from prescribed controls Results of tests of control evaluates whether controls operating as contemplated in preliminary assessment of control risk.
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Control Risk

Final Assessment of Control Risk

When preliminary assessment of control risk not supported:


revise assessed level of control risk modify nature, timing & extent of planned substantive procedures.

NIRC / ICAI

9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Detection Risk Consider assessed levels of inherent & control risks in determining nature, timing & extent of substantive procedures. To reduce audit risk to an acceptably low level consider: nature of substantive procedure timing of substantive procedure extent of substantive procedures Inverse relationship between detection risk & combined level of inherent and control risk
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Detection Risk

Regardless of assessed levels of inherent and control risks, some substantive procedures performed Higher assessment of inherent & control risks means more of substantive procedures Qualified or declaimer of opinion when detection risk regarding an assertion for material balance or transaction cannot be reduced to an acceptable level,
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Audit Risk in Small Business

Inadequate segregation of duties & lack of supervisory controls Audit evidence may have to be obtained entirely through substantive procedures.

NIRC / ICAI

9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Communication of Weaknesses

Communicate material weaknesses in accounting & internal control at an appropriate level of management.

Ordinarily in writing
Important to indicate that only weaknesses which have come to the auditors attention as a result of audit have been reported.
NIRC / ICAI 9.7.2005

AAS 6 (Revised) - Risk Assessment and Internal Control Matters for Discussion

Complex CIS environment-need for specialist Extent of substantive procedures should reflect reliance/nonreliance on internal controls

Risk based audit approach-prevalent now formalised


Assessing internal controls enables effective and efficient audit

NIRC / ICAI

9.7.2005

AAS - 21
CONSIDERATION OF LAWS AND REGULATIONS IN AN AUDIT OF FINANCIAL STATEMENTS

NIRC / ICAI
NIRC / ICAI

9.7.2005
9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Overview Introduction

Responsibility of Management
Auditors consideration Procedures when noncompliance discovered Communicating/Reporting noncompliance Withdrawal from Engagement

NIRC / ICAI

9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Introduction

Consideration of laws & regulations in an audit of FS. Noncompliance of laws & regulations by entity materially affecting F/S Term `noncompliance refers to acts of omission or commission by entity being audited, either intentional or unintentional contrary to prevailing laws & regulations.

NIRC / ICAI

9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Indications of Noncompliance

Investigation by government departments or payment of

fines
Payments for unspecified services or loans to consultants, related parties, employees or government employees Purchases at prices significantly above or below market price Unusual payments in cash & other unusual transactions
NIRC / ICAI 9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Indications of Noncompliance

Unusual transactions with companies registered in tax havens Payments without proper exchange control documentation Unauthorized or improperly recorded transactions Media comment
NIRC / ICAI 9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Introduction

Noncompliance generally based on experts advice but ultimately determined by a court of law. Auditor likely to be aware of those noncompliances

linked to events & transactions ordinarily reflected


in F/S. Auditors responsibility to consider fraud & error in audit covered by AAS - 4.
NIRC / ICAI 9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Responsibility of Management for Compliance

Achieved by: Monitoring legal requirements Internal control systems Establishing legal department and/or engaging legal advisor. Maintaining register of significant laws affecting entity & records of noncompliances. Appropriating responsibilities to internal audit & audit committee.
NIRC / ICAI 9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Auditors Consideration Audit does not prevent noncompliance but may act as a deterrent. Risk from noncompliance higher due to: inherent limitations of accounting & internal control systems persuasive rather than conclusive audit evidence override of controls by management etc. Recognition of conditions or events leading to noncompliance. Statutory requirements may require to report compliance with certain provisions of laws & regulations.
NIRC / ICAI 9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Auditors Consideration

Understanding legal & regulation framework: CAKE inquiring & discussing with management Identifying instances of noncompliance: inquiring with management inspecting correspondences-regulatory authorities
NIRC / ICAI 9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Auditors Consideration

Sufficient appropriate audit evidence regarding compliance affecting amounts & disclosures in FS Other procedures (besides above) outside scope of

audit.
Written representations from management. In absence of evidence to contrary entitled to assume compliance .
NIRC / ICAI 9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Procedures When Noncompliance Discovered

Obtain understanding of nature of act & circumstances to evaluate possible effect of noncompliance on FS Evaluating possible effect on F/S, consider: potential financial consequences whether they require disclosure whether they affect true & fair view Document findings & discuss with management.
NIRC / ICAI 9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Procedures When Noncompliance Discovered

Consult entitys lawyers or other lawyers on possible effects/consequences Effect of lack of evidence on auditors report. Reliability of management representations in light of noncompliance.

NIRC / ICAI

9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Communicating/Reporting of Noncompliance

To Management

Communicate to audit committee, BOD and senior management


Intentional and/or material noncompliance communicate without delay Senior management including members of BOD involved in noncompliance- communicate matter to next higher level.
NIRC / ICAI 9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Communicating/Reporting of Noncompliance

To Users of Auditors Report Qualified or adverse opinion. when material noncompliance not properly reflected in FS. Qualified or disclaimer of opinion. if precluded from obtaining sufficient appropriate audit evidence regarding material noncompliance. .

NIRC / ICAI

9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Communicating/Reporting of Noncompliance

To Regulatory and Enforcement Authorities

Report to regulatory and enforcement authorities in

case duty of confidentiality overridden by statute,


law or by courts of law.

NIRC / ICAI

9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Withdrawal from Engagement

No remedial action on material noncompliance Involvement of highest authority affecting reliability of management representations Communication to incoming auditor re.detailed reasons & attendant circumstances leading to withdrawal

NIRC / ICAI

9.7.2005

AAS 21 - CONSIDERATION OF LAWS & REGULATIONS IN AN AUDIT OF FS Matters of Discussion

How many Acts are there - mind boggling! Peculiar Acts Laws & Regulations affecting F/S Sufficient understanding of laws & regulations

Expert opinion/ Court of Law


NIRC / ICAI 9.7.2005

AUDITING AND ASSURANCE STANDARDS (AAS) 28 AUDITORS REPORT ON FINANCIAL STATEMENTS

NIRC / ICAI
NIRC / ICAI

9.7.2005
9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS OVERVIEW

Introduction

Basic Elements of Auditors Report


Unqualified Opinion

Modified Reports
Limitation on Scope Disagreement with Management Statement on Qualifications in Auditors Report Matters for Discussion
NIRC / ICAI 9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Introduction

Clear written expression of opinion on FS taken as a whole. BASED ON CONCLUSIONS DRAWN FROM AUDIT EVIDENCE OBTAINED

NIRC / ICAI

9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Basic Elements of Auditors Report

a) Title

b) Addressee
c) Opening or introductory paragraph d) Scope paragraph e) Opinion paragraph f) Date of report g) Place of signature, and h) Auditors signature
NIRC / ICAI 9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Basic Elements of Auditors Report

Title Appropriate title - Auditors Report

Addressee Appropriately addressed - e.g. To the Members

NIRC / ICAI

9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Basic Elements of Auditors Report

Opening or introductory Paragraph Financial statements of entity audited, including date and period covered FS responsibility of entitys management and responsibility of auditor to express an opinion on FS.
NIRC / ICAI 9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Basic Elements of Auditors Report

Scope Paragraph Audit conducted in accordance with auditing standards generally accepted in India. Audit planned & performed to obtain reasonable assurance that FS are free of material misstatement.. Terms of Engagement Matters prescribed by Legislation / Pronoucement of ICAI
NIRC / ICAI 9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Basic Elements of Auditors Report

Scope Paragraph Auditors report should describe audit as including: a) Examining, on a test basis, evidence to support amounts & disclosures in FS b) Assessing accounting principles used in preparation of FS c) Assessing significant estimates made by management in preparation of FS d) Evaluating overall FS presentation. Audit provides a reasonable basis for opinion.
NIRC / ICAI 9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Basic Elements of Auditors Report

Opinion Paragraph Clearly indicate financial reporting framework used to prepare the FS FS give a true and fair view in accordance with that financial reporting framework FS comply with statutory requirements.
NIRC / ICAI 9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Basic Elements of Auditors Report

Date of Report Date on which auditor signs report. Not earlier than the date on which FS are signed or approved by management. Place of Signature Specific location, where audit report signed.
NIRC / ICAI 9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Basic Elements of Auditors Report

Auditors Signature Signed by auditor in personal name

Where firm is appointed as auditor, report signed in personal name of auditor and in name of the audit firm.
Partners/proprietors membership number
NIRC / ICAI 9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Unqualified Opinion

True and fair view Relevant GAAP Statutory Requirement Disclosures Change Effect & Disclosures
NIRC / ICAI 9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Modified Reports

Auditors report considered modified when it includes: a) Matters That Do Not Affect Auditors Opinion Emphasis of matter b) Matters That Do Affect Auditors Opinion Qualified opinion

Disclaimer of opinion
Adverse opinion
NIRC / ICAI 9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Modified Reports

Matters That Do Not Affect Auditors Opinion Paragraph to highlight material matter regarding a going concern problem where going concern question not resolved and adequate disclosures made in FS. Paragraph if significant uncertainty, resolution of which is dependent upon future events and which may affect FS.
NIRC / ICAI 9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Modified Reports

Matters That Do Affect Auditors Opinion Limitation on scope of auditors work; or

Disagreement with management re.acceptability


of accounting policies selected, method of application or adequacy of FS disclosures.

NIRC / ICAI

9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Modified Reports

Matters That Do Affect Auditors Opinion A qualified opinion when: disagreement with management is not so material and pervasive as to require an adverse opinion Limitation on scope is not so material and pervasive as to require disclaimer of opinion. subject to or except for
NIRC / ICAI 9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Modified Reports

Matters That Do Affect Auditors Opinion Disclaimer of opinion when limitation on scope is material and pervasive Adverse opinion when disagreement is material and pervasive to FS

NIRC / ICAI

9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Modified Reports

Matters That Do Affect Auditors Opinion Other than unqualified opinion: Clear description of all substantive reasons Unless impracticable quantification of possible effect(s) individually and in aggregate on FS

NIRC / ICAI

9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Limitation on scope

Limitation on scope of Auditors work Describe limitation

Indicate possible adjustments to the FS.

NIRC / ICAI

9.7.2005

AAS28 AUDITORS REPORT ON FINANCIAL STATEMENTS Disagreement with Management

Matters Acceptability of accounting policies selected Method of their application, Adequacy of disclosures in FS.

If such disagreements material to FS - qualified or adverse opinion.


NIRC / ICAI 9.7.2005

Statement on Qualifications in Auditors Report

Reporting Requirements Under Companies Act Statements of fact Opinions

Reporting: u/s 227(1A) of Companies Act u/s 227(4A) of Companies Act


NIRC / ICAI 9.7.2005

Statement on Qualifications in Auditors Report

Qualification in Auditors Report General Considerations Aspects considered while Qualifying Reports

Manner of Qualifying Reports


Directors Comments on Qualifications Separate Report to Directors etc. Branch Audit Reports Total Effect of Qualifications-opinion may change
NIRC / ICAI 9.7.2005

AUDITING AND ASSURANCE STANDARDS (AAS) 29

AUDITING IN A COMPUTER INFORMATION SYSTEMS ENVIRONMENT

NIRC / ICAI

NIRC / ICAI

9.7.2005

9.7.2005

AAS - 29 Auditing in A CIS Environment Overview

Introduction Skills and Competence Planning Assessment of Risk Audit Procedures Documentation
NIRC / ICAI 9.7.2005

AAS - 29 Auditing in A CIS Environment Introduction

Effective Date:

On or after April 1,2003


Purpose of this AAS: Procedures in audit under CIS environment

NIRC / ICAI

9.7.2005

AAS - 29 Auditing in A CIS Environment Introduction

When does a CIS environment exist? A CIS environment exists where: One or more computer(s) of any type or size is (are) involved in processing of financial information Whether operated by entity or a third party
NIRC / ICAI 9.7.2005

AAS - 29 Auditing in A CIS Environment Introduction

Overall objective & scope of an audit does not change in CIS environment, but may effect: Procedures followed, in obtaining sufficient understanding of accounting and internal control system Evaluation of inherent & control risk

Design & performance of tests of control & substantive procedures


NIRC / ICAI 9.7.2005

AAS - 29 Auditing in A CIS Environment Introduction

Factors determining evaluation of CIS environment Extent to which CIS environment used in accounting system System of Internal Control in existence Existence or non-existence of audit trail
NIRC / ICAI 9.7.2005

AAS - 29 Auditing in A CIS Environment Skills and Competence

Sufficient knowledge of CIS to plan, direct, supervise, control and review work Consider specialized CIS skills needed Compliance with AAS 9 Using the Work of an Expert,
NIRC / ICAI 9.7.2005

AAS - 29 Auditing in A CIS Environment Planning

Understanding significance & complexity of : CIS environment Complexities of CIS activities Availability of data for use in audit Understanding would include : CIS Infrastructure Complexity of processing like automated computation & generation of entries Determination of availability of data
NIRC / ICAI 9.7.2005

AAS - 29 Auditing in A CIS Environment Planning

Understand CIS environment influencing assessment of inherent & control risk E.g. Lack of transaction trails Uniform processing of transactions Potential for errors and irregularities

Dependence of Other Controls over computer processing


NIRC / ICAI 9.7.2005

AAS - 29 Auditing in A CIS Environment Planning

Evaluate reliability of Accounting and Internal Control System to: Ensure authorized, correct & complete data available for processing Timely detection and correction of errors Ensure accuracy and completeness of output Prevent unauthorized amendments to programs

Provide for safe custody of source code of application software


NIRC / ICAI 9.7.2005

AAS - 29 Auditing in A CIS Environment Assessment of Risk

Assessment of inherent and control risks for material FS assertions - AAS 6 (Revised) Pervasive & account specific effect of inherent & control risks in a CIS environment

Emerging CIS technologies


NIRC / ICAI 9.7.2005

AAS - 29 Auditing in A CIS Environment Audit Procedures

Adequate procedures exist to ensure data transmitted is correct and complete Cross verifications of records, reconciliation statements & control systems Use of manual audit procedures or computer assisted audit techniques, or a combination of both to obtain sufficient evidential matter

NIRC / ICAI

9.7.2005

AAS - 29 Auditing in A CIS Environment Documentation

Document

Audit plan,
Nature, timing and extent of audit procedures performed Conclusions drawn from evidence obtained

Audit Electronic evidence adequately and safely stored and retrievable in its entirety
NIRC / ICAI 9.7.2005

AAS - 29 Auditing in A CIS Environment Matters for Discussion

CIS knowledge now necessary for auditors Involvement of specialists

Auditors also need sophisticated CAAT tools to test controls under CIS environment Can audit be outsourced out of the country in a CIS environment ?
NIRC / ICAI 9.7.2005

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