The Audit Process

by Steve Collings
access120 days access
cpd hours4 CPD hours

This course will enable you to:

  • Gain a detailed overview of the auditing landscape, and examine the role of the auditor
  • Appreciate each stage of the audit process, why they are important and the possible challenges involved
  • Explore some of the ethical requirements for auditors, potential threats to their independence and how to manage them
  • Understand audit engagement procedures and audit planning
  • Examine the procedures for gathering audit evidence
  • Gain an overview of the finalisation and completion stage of the audit

What is the role of the auditor? There is a widespread belief that it is to provide absolute assurance that the financial statements are free from material misstatement. Although this is not in reality possible, recent news stories about corporate collapses and scandals, from Carillion to Patisserie Valerie have led to questions about the value of audit.

At a time when there are calls for radical overhaul of the audit profession, Steve Collings provides a calm, rational voice, arguing that by following the audit process, from planning the audit, through gathering the evidence, to finalising the audit, we can raise the quality of work and avoid the mistakes that bring the profession into disrepute.

Alongside an in-depth introduction to the audit process, this course gives you insight into the practicalities of audit and provides a detailed overview of the International Standards on Auditing (ISA).

Introducing auditing

  • What is auditing?
  • What is the expectation gap in audit?
  • Why is auditing important?
  • What are the advantages and disadvantages?
  • What are the ethical requirements for auditors?
  • What are the threats to auditor independence?
  • How should audit firms deal with any threats?
  • What are the corporate governance issues?

Planning the audit

  • When should audit firms accept a new engagement?
  • What happens when a firm accepts an engagement?
  • What is a letter of engagement?
  • What is a misstatement?
  • What is materiality?
  • What does the auditor need to understand about the entity?
  • What do you need to know about the entity's internal control system?
  • How do you calculate audit risk?
  • How should audit firms respond to risk?
  • How do you develop the audit strategy and the audit plan?

Gathering audit evidence

  • How do you obtain audit evidence?
  • What are intangible assets?
  • How do you audit intangible assets?
  • What are related parties?
  • How do you audit related parties?
  • What are financial instruments?
  • How do you audit financial instruments?
  • What is revenue?
  • How do you audit revenue recognition?
  • How do you audit tax?

Finalising the audit

  • What is going concern?
  • Who decides whether a company is a going concern?
  • What are the indicators that an entity may not be a going concern?
  • How do you audit going concern?
  • How do you report on going concern?
  • What are subsequent events?
  • How do you audit subsequent events?
  • What is a written representation?
  • How does the auditor form an audit opinion?
  • What are the different types of audit opinion?
  • What is an emphasis of matter paragraph?

Steve Collings is the audit and technical director at Leavitt Walmsley Associates Ltd, Cheshire. He specialises in UK GAAP, IFRS, Solicitors Accounts Rules and auditing and is also a nationwide lecturer on these subjects. He is the author of several books, articles and Whitepapers on the topics of financial reporting and audit. Steve is also a member of the UK GAAP Technical Advisory Group at the Financial Reporting Council (FRC) who are responsible for maintaining UK and Irish Financial Reporting Standards.

Steve was awarded Accounting Technician of the Year at the 2011 British Accountancy Awards and Outstanding Contribution to the Accountancy Profession in 2013 by the Association of International Accountants. He also works with some of the main professional bodies in respect of interpretational aspects of UK GAAP and preparing their responses to Consultations or Exposure Drafts issued by the FRC.

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