159 paragraphs found
If the auditor identifies a risk of material misstatement due to fraud that affects inventory quantities, examining the entity’s inventory records may help to identify locations or items that require specific attention during or after the physical …
The auditor may identify a risk of material misstatement due to fraud affecting a number of accounts and assertions. These may include asset valuation, estimates relating to specific transactions (such as acquisitions, restructurings, or disposals of a …
Examples of possible audit procedures to address the assessed risks of material misstatement due to fraud, including those that illustrate the incorporation of an element of unpredictability, are presented in Appendix 2. The appendix includes examples of …
Material misstatement of the financial report due to fraud often involves the manipulation of the financial reporting process by recording inappropriate or unauthorised journal entries. This may occur throughout the year or at period end, or by …
Further, the auditor’s consideration of the risks of material misstatement associated with inappropriate override of controls over journal entries is important since automated processes and controls may reduce the risk of inadvertent error but do not …
When identifying and selecting journal entries and other adjustments for testing and determining the appropriate method of examining the underlying support for the items selected, the following matters are of relevance: The assessment of the risks of …
The auditor uses professional judgement in determining the nature, timing and extent of testing of journal entries and other adjustments. However, because fraudulent journal entries and other adjustments are often made at the end of a reporting period, …
The preparation of the financial report requires management to make a number of judgements or assumptions that affect significant accounting estimates and to monitor the reasonableness of such estimates on an ongoing basis. Fraudulent financial reporting …
The purpose of performing a retrospective review of management judgements and assumptions related to significant accounting estimates reflected in the financial report of the prior year is to determine whether there is an indication of a possible bias on …
A retrospective review is also required by ASA 540. [20] That review is conducted as a risk assessment procedure to obtain information regarding the effectiveness of management’s previous accounting estimates, audit evidence about the outcome, or where …