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Audit completion

Presentation and disclosure

ISA 315 A11 (c) Presentation and Disclosure
Accuracy and valuation
Occurrence, rights and obligations
Classification and understandability
Source document Financial statements
Substantive test of details
Accuracy and valuation
Agree all numbers in the financial statements to auditing working papers
Use a disclosure checklist to identify any incomplete
Occurrence, rights and obligations
Inspect financial statements that all the transactions disclosed pertain and have occurred
Classification and understandability
Inspect the financial statements that the wording is clear and understandable
Inspect the financial statements that are disclosed in accordance with IFRS
Analytical procedures
Use comparisons e.g. Gross margin, Changes in sales, Change in debtors balances, Cost of sales and
inventory, Goodwill, property plant and equipment
Contingent liabilities and Commitments
Pending or threatened litigation
Actual or possible claims and assessments against the equity
Income and tax disputes
Products defects or warranties
Guarantees of obligation
Agreement to purchase receivables that have been sold
During the audit
Inspect minutes of meetings
Review contracts, loan agreements, leases, and correspondents from government and regulatory
Review tax returns and SARS correspondence
Inspect bank confirmations
During audit completion
Inquiry and discussion with management about its policies and procedures for identifying,
evaluating and accounting for contingencies
Examine invoices form lawyers for pending or threatened lawsuits
Obtain a legal letter that describes and evaluates any litigation, claims or assessments
Obtain written representation from management that all litigation, asserted and unasserted claims,
and assessments have been disclosed in accordance with the applicable financial reporting

Review audit work papers for signs of contingencies

Obtain and evaluate letters from the clients attorneys(by letter of audit inquiry)
Inquiry of clients attorney for
Pending litigation
Asserted and unasserted claims with or assessment with which the client has involvement
A request of the law firm to identify any unlisted pending or threatened legal actions
Subsequent Events
Audit procedures
Inquire from management
Correspond with attorney
Review internal statements prepared subsequent to balance sheet date
Examine minutes issued subsequent reporting to the balance sheet date
Obtain managements representation letter
Management Representation Letter
Purpose of the letter
To impress upon management its responsibility for the assertions in the financial statements
To remind management of potential misstatements or omissions in the financial statements
To document the responses from management to inquiries about various aspects of the audit
Four categories in management representation letter
Responsibility for financial statements
Completeness of information
Recognition, measurement, and disclosure
Recording and Disclosing subsequent events
Communicate with the Audit Committee and Management
Communicate internal control deficiencies
Other communication with audit committee
Communicate fraud and illegal acts
Management letters