Visualise the Progress & Risks of an Audit Engagement

Author: Tim Lew, Product Manager: Audit, Caseware Australia & New Zealand

Have you seen our “Constellations” feature yet?

Caseware Audit System provides customers with the means of conducting an audit via the available electronic workpapers and forms. We asked ourselves:

1. Is there a better way to perform a more efficient audit?
2. Can Caseware assist in focusing on critical information that can sometimes be lost in the details of reports and programs?
3. Are auditors able to see the forest through the trees?

Constellations could be the answer!

The Constellations feature provides a visual presentation of the key objects in your engagement file. The purpose of this utility is to make it easier to analyse your audit engagement compared to a traditional paper presentation, and/or the Risk reports and FSA worksheets. With a bit of perseverance and proper analysis we expect that you can perform a better and more efficient audit, by focusing on what is critical and not get lost in the details. It also is a tool to help you make sure the documentation in your file is consistent and complete, so you are not at risk for a review.   Constellations can be used in many different ways in many different stages of the audit. Let’s walk you through a couple of examples. Open Constellations by pressing this button on the Template toolbar.

First Example: Risk Assessment and Team Planning.

In this scenario, you have identified all your risks for the engagement and successfully applied the risks to the associated workpapers. You have reviewed the Risk Report and are satisfied with the current layout.
Next, open Constellations, and choose the appropriate options from the Skin-menus above. In this case, lets choose Planning > Material FSAs, Significant Risks.

What you should be looking for here is to ensure the risks are being adequately mitigated by the Audit Response, and by the Controls that the client has in place. One thing to identify is the number of the risk nodes (red circles). I can see that risk# SB-5 has the number 7. If I click on this, it lets me see the detail of the 7 Procedures linked to this risk.

 
Look at risk# UM-2.  There are no numbers in the risk node, therefore no procedures are assigned to mitigate this risk. Also note that one of the controls is inefficient, making this risk even more significant. This immediately can be addressed during our Team Planning.

Second Example: Addressing ASA 330 –  ensure all your risks have been mitigated.

In this scenario, you should have identified potential issues or risks, and conducted the sufficient walkthroughs to ensure the client’s controls are satisfactory.
In this case, lets choose Completion > Material FSAs with associated risks not mitigated. What you are looking for is risks that have not being mitigated by their control and that you have alerted those charged with governance with a reportable item – our Management Letter.
If we consider risk# JA-10, we can see that the risk has not been addressed by the control. We can also see that the control is inefficient, however we can be assured that we have alerted Those Charged with Governance about the risk.

 
Final Example: Constellations Views and how they can give a more simple, but comprehensive visual of all the key components of the Audit.

The key areas of the Audit are:

1. FSAs (Yellow)
2. Entity Level Categories (Orange)
3. Business Cycles (Purple)
4. Risks (Red)
5. Controls (Blue)
6. Reportable Items (Green)
7. Assertions (C – Completeness, E – Existence, A – Accuracy and V – Valuation).

Depending on what you wish to look at, first choose the appropriate view structure from the buttons in the top left corner:

1. Relationship View
2. Key Audit Group View
3. Sorted Group View

 
Then start using the filters to apply my preferred visual for this engagement, using the feature on the left.
Once you have all the filters needed, save these as workpapers to your own engagement document manager to reload at a later stage.

Conclusion:  

• The information for your audit is entered via the risk, controls, reportable items dialogs and FSA worksheet within your engagement file.
• Constellations allows you as the auditor, partner or manager to visualise your audit and use another approach to ensure all your documentation, evidence and procedures are referenced correctly to mitigate risks.

 
On the flip side, you may also use Constellations to document your controls to present to your auditors.

Associated FAQs:

1. What is Caseware Constellations?
2. How do I adopt the Audit Phases with Constellations?
3. Why does the font differ between Constellations Nodes?
4. Why is my constellations not working?

Sub FAQ – Materiality, FSA and Risks / Controls / Reportable Items.