Audit & Assurance

Chapter 3

Audit Process

^[1] (RISKS, everything that might stand in the way of the goals to achieve a company’s goals).

Management Responsibilities: when you perform an audit is the financial statements

Auditor is interested in what management does. For errors in financial statements for decreases risk for auditor (Audit Risk)

*COSO Model is used mainly to identify the internal controls over (OPERATIONS)

Risk appetite of operations^[a]:

-avoid ->

-accept -> Nothing will be done

-manage -> procedures in place to reduce risk (Implementing internal controls over financial reporting)

-share risks -> probably insure the risk (Fire insurance)

Internal control over financial reporting (ICOFR) -> COSO^[b]

COSOMODEL

Control environments

Control activities

Monitor

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INTEGRATED AUDIT ^[c]-> an audit by the auditor public companies under supervision of PCAOB (US) (Beurs genoteerde companies)

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CHAPTER 3

 Slide 1: ^[d]

Reasonable assurance -> auditor cannot give 100% assurance That everything in FS are right. Because the auditor is not present with every management and operational action.

This slide shows the responsibilities in its work

Slide 2:

Building blocks of an audit

FS MADE BY Management. Is a summary what MGT does with the company financially

Divide by 2 assertions^[e] (See slide)

Slide 3

Transactions (assertions regarding profit and loss)

Accounts (Regarding Balance sheet)

Presentation and disclosure (Disclosure)

Slide 4

Integrated audit (Remember to review INTEGRATED AUDIT)

Management is responsible for everything. Auditor only needs to audit

Slide 5

• Just read. Not been able to pay attention

Slide 6

Audit FS and provide opinion of the FS

Detect errors and unintentional mistakes and fraudulence misstatements