Let’s examine some of the recommended requirements for the Audit Planning & Risk Assessment external audit phase.
“The importance of robust pre-engagement acceptance procedures is clear. An auditor who takes on an engagement that they are either ill-equipped to perform, or are prohibited from performing under relevant legislation or professional standards, can expose the firm to a variety of risks including litigation and reputational.”
David Stevens, independent audit consultant & Caseware’s expert content provider
Audit Engagement File Setup
Ensuring compliance with all relevant Australian Auditing Standards (‘ASAs’) and legislation, while still performing efficient, quality audits can be hard work. ‘Death by checklist’ is a very real concern for all auditors! This has been cleverly addressed with smart technology used in Caseware's Agile Audit.
As soon as an engagement file is created:
- The Optimiser assists you to define the entity and tailors the content so only the relevant ASAs and legislation are included in the workpapers throughout the file.
- Smart procedures within key planning documents offer documentation options, making it quick and easy to tailor the workpapers to suit the specific engagement.
- The built-in integrations import and map client data to leadsheets, materiality, ratio calculations, and the powerful Risk Assessment Report.
Preliminary Engagement Activities
To help your planning process pre-audit, Agile Audit has:
- A smart pre-engagement checklist that address the requirements of ASQC 1 and ASA 220.
- A template Engagement Letter (based on the example in ASA 210 appendix) and a placeholder option for easy and consistent filing of the signed letter.
Planning the Audit Engagement
On planning an audit, Dave Stevens advises:
“One of the key auditing standard objectives of an audit is to plan it so that it will be performed in an effective manner. A broader business objective of the audit firm is for an audit to also be performed in an efficient manner. Measure twice, cut once.
Investing sufficient time to understand the entity and assess identified risks will enable the audit team to devote the resources necessary to tackle risk areas of the audit, and reduce over-auditing in less risky audit areas. The benefits of a well-planned audit in the current period will also have positive implications for subsequent audit engagements.”
Agile Audit allows auditors to efficiently and effectively document their understanding, their consideration of risk areas, and their overall audit strategy plan.
Features such as:
- Concise ‘Understanding the Entity’ worksheets assist with all relevant considerations required by ASA 240 and 315.
- The Risk and Controls modules enables easy recording and referencing of identified risks and controls to the planned audit work that will assess and address each.
- The Risk Assessment Report provides a powerful visual snapshot of each financial statement area and the resulting assessments.