Required Documents/Procedures For Auditing

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  • #191041
    marie22
    Member

    So I don’t know about everyone else, but I’ve had the hardest time figuring out which procedures/documents were required or recommended in the auditing process. I’ve gotten a list together of what is required and what isn’t (for GAAS, not IFRS). Please let me know if you notice any mistakes, or definitely add something if you think I missed something.

    1) Engagement Letters- “Should”- A engagement letter is “mandatory” unless the auditor has a legitimate reason to do otherwise. Engagement letters for compilations and reviews are “recommended” UNLESS the auditor does not issue a compilation report- then an engagement letter is required.

    2) Communication with predecessor auditor PRIOR to engagement- REQUIRED. Communication with predecessor auditor after accepting engagement (reviewing working papers, audit results, etc.)- NOT required

    3) Analytical Procedures- Required to be performed as a risk assessment procedure (planning phase) and during the final wrap up review. Not required to be performed as a substantive test.

    4) Documentation of internal control– REQUIRED (although type of documentation, i.e flowchart, and extent can vary)

    IT- REQUIRED to document their understanding of an audit client’s IT system, accounting records and supporting information, as well as significant general ledger accounts

    5) Internal Control Deficiencies in a non-integrated audit – REQUIRED to communicate significant deficiencies and material weaknesses to management and those charged with management. NOT REQUIRED to communicate control deficiencies. Communication should be WRITTEN.

    But in an integrated audit, material weaknesses, sig deficiencies, AND control deficiencies are REQUIRED to be communicated.

    6) Fraud Findings: REQUIRED to communicate to audit committee of all fraud, material and immaterial, to management. All MATERIAL fraud whether involving lower level employees or management REQUIRED to communicate to audit committee. Immaterial fraud by lower level employees- NOT REQUIRED.

    7) Management Representation Letter- REQUIRED. If auditor unable to obtain one- should issue disclaimer.

    8) Letter of audit inquiry to lawyers- presumptively REQUIRED

    Now obviously this list could be infinite. But I just picked the ones that confused me most. Lemme know if I made any mistakes!

    AUD: 91.
    BEC: 69, 81
    REG: 83 (expired), 79
    FAR: 59, 77

    I'M FINALLY DONE!!!!!

Viewing 7 replies - 1 through 7 (of 7 total)
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  • #636382
    ocboa
    Member

    Good summation. Saved

    #636383
    jstay
    Participant

    Thank you!!!

    #636384
    Troblin
    Participant

    Thanks!

    FAR: 85(11/22/2014) - Becker(full)/Ninja MCQ (5 day cram)
    AUD: 79 (2/1/2015) -Becker/Ninja MCQ/Ninja Notes
    REG: 84(4/19/2015) -Becker/Ninja MCQ/Ninja Notes
    BEC: 83 (7/13/2015) -Becker/Ninja MCQ/Ninja Notes

    Date I Got My Life Back!: 8/4/2015 🙂

    #636385
    Troblin
    Participant

    I would also like to add, that I think that a management representation letter is NOT REQUIRED for compilation engagements.

    FAR: 85(11/22/2014) - Becker(full)/Ninja MCQ (5 day cram)
    AUD: 79 (2/1/2015) -Becker/Ninja MCQ/Ninja Notes
    REG: 84(4/19/2015) -Becker/Ninja MCQ/Ninja Notes
    BEC: 83 (7/13/2015) -Becker/Ninja MCQ/Ninja Notes

    Date I Got My Life Back!: 8/4/2015 🙂

    #636386
    Anonymous
    Inactive

    For compilations and reviews, the language in SSARS requires obtaining an understanding with management and says that you “should” obtain an engagement letter, which suggests that it is presumptively mandatory as well.

    #636387
    smeech8000
    Participant

    SSARS 21 requires engagement letters for both levels of service:

    https://www.aicpa.org/Research/Standards/CompilationReview/DownloadableDocuments/SSARS_21_Summary.pdf

    B 92
    A 99
    R 90
    F 92

    Becker Self-Study

    OH CPA since 2/18/14

    #636388
    Anonymous
    Inactive

    saved… i was scratching my head with the same question!!

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