Recent AICPA standards, SAS 142 and SAS 145, have expanded and clarified audit evidence and documentation standards. The role of the reviewer has expanded, and auditors need to know how to respond. Audit documentation provides the principal support for the independent auditor’s report. Therefore, it is important that workpapers meet professional standards. Anything less could result in peer or regulatory review deficiencies – or, as a worst-case scenario, lawsuits when fraud occurs at a company. Effective workpaper review is an important part of meeting professional standards at the engagement level as well as the overall firm level. In addition, the workpaper review process should be used as a tool for professional development and promoting efficient audits. During a financial statement audit, the auditor also obtains an understanding of the entity and its environment (including its internal control), performs a risk assessment, and from that work designs substantive procedures that will be responsive to the level of risk assessed. At the end of the audit, the auditor assesses the sufficiency and appropriateness of the audit evidence obtained to ensure that he or she has considered everything necessary to provide an opinion on the financial statements. This course addresses the characteristics of audit evidence and how the auditor evaluates the sufficiency and appropriateness of the evidence throughout the audit.
Learning Objectives
Discuss the importance of documentation and how it fits in the overall audit quality process, including the various levels personnel in the firm play in workpaper review Discuss tips for an efficient workpaper review process that complies with professional standards, including the evaluation of the sufficiency and appropriateness of evidence obtained from tests of controls and substantive test of details Describe how the workpapers should be complete, accurate, and able to stand on their own and what areas reviewers should focus on in risk assessment, internal control, substantive testing, concluding, and reporting
Major Topics
Documentation as a means of audit quality Responsibilities of the workpaper reviewer Important tips for providing review notes that will promote an effective and efficient financial statement audit Appropriate review considerations at various phases of the engagement, including before and after audit report date and report release SAS 142, Audit Evidence Relevance and reliability of audit evidence and sources of evidence Evaluation of tests of controls and the sufficiency and appropriateness of evidence obtained
