MIDTERM NOTES in Auditing 1
MIDTERM NOTES in Auditing 1
Steps In The Audit Process 1. Misappropriation of assets – theft or misuse of an organization’s assets
Planned Scope and Timing of the Audit A well-controlled organization has an appropriate structure and clearly defined lines of
Communicate those charged with governance to understand better the consequences of responsibility and authority where everyone in the organization has equal responsibility for the
the auditor’s work effective operation of internal control. SOME
Independence A deficiency in design of internal controls exists when an existing control is not properly
designed so that, even if the control operates as designed, the control objective would not be
In the case of listed entities, the auditor shall communicate with those charged with
met.
governance a statement that the engagement team has complied with relevant ethical
requirements regarding independence
Corporate policies designed to attract, train, and evaluate competent employees are
Matters to be Communicated considered to be control activities in the COSO framework for internal controls. CONTROL
ENVIRONMENT
The auditor shall communicate with those charged with governance the responsibilities of
the auditor in relation to the financial statement audit, including
In addition to controls being specific, they may be broad, such as policies regarding a code of
The audit of the financial statements does not relieve management or those ethics.
charged with governance of their responsibilities
Controls to monitor results of operations are considered to be transaction controls. ENTITY
WIDE CONTROLS