Auditing Bits in BytesT Session 4: Assessing and Responding to Risk

Overview

Auditing Bits in BytesT - A Practical Break-Down of "Real World" Best Practices Applied in Highly Successful Audits is a series of eight individual sessions that guide professionals through the complete audit process from "A to Z" -- starting with Pre-Engagement Planning Activities, and going all the way through Wrap-up and Quality Control. Attempting to perform an effective and efficient audit can be intimidating and confusing, for new and experienced auditors alike. This series of eight individual segments will provide valuable tips and techniques from an experienced auditor that are needed to successfully design and perform financial statement audits in "real-life" circumstances. Extensive illustrative examples and exercises will be used to reinforce a practical understanding of the most critical principles and standards that support a high-quality, insightful, and profitable engagement.

This 2-hour session focuses on how to appropriately identify, evaluate, document and respond to risks of material misstatement due to either fraud or error in order to effectively and efficiently design the nature, timing and extent of further audit procedures (tests of controls for operating effectiveness and substantive audit procedures).

Highlights

Key Topics

• Audit Risk Components: Inherent Risk, Control Risk, & Detection Risk - Understanding the underlying intent of each of the components, and key considerations in properly assessing and documenting the basis for conclusions
• Identifying & Evaluating Risk - How to synthesize all the information gathered throughout the risk assessment process into a concise summary of risk assessment conclusions
• Determining Significant Risks Requiring Special Audit Considerations - What differentiates this type of risk from other types of risks of material misstatement, and what that means in regards to the nature, timing and extent of further audit procedures
• Engagement Team Discussion - Common deficiencies in the performance of this required important activity
• Linking Assessed Risk of Material Misstatement to the Detailed Audit Plan - How judgment calls directly influence the effectiveness and efficiency of the detailed audit plan
• Extensive illustrative examples will be used to reinforce a practical understanding of the most critical principles and standards that support a high-quality, insightful, and profitable engagement

Prerequisites

None

Designed For

Who Will Benefit

• Anyone who is new to auditing or desires a refresher in how to perform effective and efficient financial statement audits for non-issuers in accordance with professional and regulatory standards

Objectives

Learning Outcomes

• Describe how to properly identify, evaluate, document and respond to risks of material misstatement due to either fraud or error
• Recognize best practices for effective and efficient engagement team discussions and other risk assessment activities
• Identify how to link assessed risk of material misstatement to the design of the nature, timing and extent of further audit procedures