CAS 240 Fraud 2 types: misappropriation of assets, fraudulent reporting Work: PS, discuss with team on how and

where, identify risk factors, assess risk, design procedures to minimize risk (staff, evaluate policies, type & timing of testing, additional work) Management - fraud prevention, written rep on resp. for IC, assessment and knowledge of fraud, fraud is intentional, error is not

CAS 250 Illegal Acts Req. to identify miss due to non-compliance, not resp. for preventing non-compliance, understand rules/laws, inquire mgmt on compliance & inspect talks with regulating bodies 2 types: direct effect on material amts S&A regarding compliance, indirect but affects going concern identify non-compliance If non-compliance understand, discuss with mgmt, seek legal, evaluate implications on audit, communicate to those charged with governance or those outside entity

CAS 450 Evaluate Miss. found during audit Identified and uncorrected miss., accumulate and change audit plan if needed, reassess M Must ask mgmt to correct, state effects, if not understand why, consider when opinion Written rep from mgmt on M of miss.

CAS 230 Documentation Engagement, threats and safeguards, M, risk Basis for conc, planning and performance, direct and supervise, accountable, record for future audits, QC, external inspections File done within 60 days of AR date, complete to understand NET, results, sig matters Record characteristics of issues, who and when work performed, who and when reviewed After AR date what happened? New procedures, evidence, conc reached, effects, when and who made changes, no deletions allowed

CAS 300 Planning Prelim acceptance, QC, ethical req, independence, understand terms: engagement letter Audit strategy: risk, M, approach, fraud, scope, reporting obj, NET resources Plan: risk assessment procedures, audit procedures, other

Internal Control (IC) Mgmt resp. to establish & maintain IC, auditor evaluates and tests controls Reliable fin rep, effective and efficient operations, compliance with law and regulations Reasonable but not absolute assurance (CR never 0) - limited by human error and collusion 1. Control environment 2. Risk assessment process 3. IT system 4. Control Act 5. Monitoring

CAS 610 Using Work of Internal Auditor Does not reduce resp. of auditor If work is adequate and effect on NET of auditors procedures Adequate by judging competence, objectivity, due care, effective communication

Effect on NET by the NET work of IA, risk of miss, subjectivity of IA when evaluating evidence

CAS 265 Deficiencies in IC Deficient when: control unable to prevent miss, control missing, significant deficiency in IC Req: use a written derivative report to communicate with senior level mgmt, BOD not saying will fix problem

CAS 505 External Confirmations Evidence more reliable if independent source, directly obtained, exists as a document Auditors maintains control over external confirmation requests: information confirmed, selecting confirming party, designing requests, sending requests and follow-up requests If mgmt refuses to send inquire why, implications, alt. audit procedures to obtain S&A If mgmt unreasonable and no alt procedure communicate with governance 260 and modify 705

CAS 530 Audit Sampling Provide a basis to draw conclusions about the popn. Sample size that reduces risk to a low level; each sampling unit has an equal chance of selection Performance procedure on selected or replacement item, if unable to apply procedure treat as deviation or miss. evaluate their effect on audit; if very rare prove anomaly by additional work and S&A that it does not affect rest of audit Project miss found in sample to popn.

CAS 501 Audit evidence for specific items (inventory, litigations) Inventory Existence and condition by: attend count, evaluate procedures, observe performance, inspect, test counts, inventory records reflect actual inventory count results, if count not y/e rollforward/rollback, if at 3rd party confirm quantity and condition, inspect Litigation Inquire with mgmt, review minutes of meeting between mgmt and legal counsel &review legal expense accounts. If M, directly speak with lawyers by legal letter, if unable to alt audit procedures or if mgmt refuses modify opinion. Request mgmt to write all known actual or possible claims that affect f/s mgmt rep. CAS 560 Subsequent Events SE are those that events between date of f/s and date of AR and the facts that became known to the auditor after the AR date Req to obtain S&A that all SE that require adjustment have been identified: by understanding their procedure to identify SE, inquire with mgmt if SE would affect f/s, reading minutes of meetings after date of f/s, read last interim statements, written rep that SE have been adjusted for Consider dual date as appropriate

CAS 580 Written Representations Obtain from mgmt that they fulfilled resp. in preparing f/s completely, to support other audit evidence by means of rep, to respond to written rep provided by mgmt or if not provided

A written rep is a stmt by mgmt confirming certain matters or to support audit evidence Written rep for: preparing f/s under GAAP, provided auditor with relevant info and all tx, understand their resp. described in engagement letter If inconsistent with evidence consider impact on audit evidence, If mgmt refuses disclaim opinion

CAS 260 Communication with those charged with governance Req: communicate resp of auditor, overview of planned scope and timing of audit, to obtain info relevant to audit, provide timely observations, effective 2-way communication

Examples: Mgmt Rep Letter Their resp, info provided, access, risk assessment, fraud assessment, illegal acts Legal Letter Mgmt letter to law firm with description and eval of claims, properly described? Reasonable? Any o/s claims? send a copy to auditor

CAS 520 Analytical Procedures Use of analysis as substantive testing Req: obtain relevant and reliable substantive testing evidence Design procedures near the end of the audit to assist with conc on whether f/s are consistent with auditors understanding of entity.

CAS 540 Auditing Accounting Estimates Req: determine if estimates reasonable and in context of framework, related disclosures are adequate Obtain an understanding of how they determine estimate and assess risk of a miss Consider: source of data, methodology, relevant controls, underlying assumptions, method changes from prior period, assessment of uncertainty, written rep if they believe assumptions reasonable

S. 5100 GAAS General: technical training, proficiency, due care, objective Examining plan and supervise, understand risk, assess risk, perform procedures to address risk, obtain S&A evidence

CAS 805 Audit of financial information Forming opinion on a single financial statement, or on a specific element, account or item of a f/s.

CAS 5815 Audit of Compliance Deal with matters within professional competence of auditor

S. 8100 GRS General: technical training, proficiency, due care, objective

Review planned, supervised, knowledge of business, assess if information is plausible Consists of discussion, enquiry and analysis only; more work if doubting the plausibility Reporting indicate scope, state that this is not an audit

8200 Review of Financial Statements Moderate level of risk, Negative assurance, criteria is GAAP

8500 Review of Financial Information 8600 Review of Compliance Other No assurance reports Only applies procedures requested by client, users get assurance because they are sophisticated Stds: technical training, proficiency, planned, supervised, due care, objective Accountants report identify fin. Info and procedures performed, state factual results and state no opinion, state not an audit, indicate restrictions and disclose name and address

9100 Report on Procedures 9110 Report on IC Procedures 9200 Compilations Not constrained by GAAP Perform compilation if there is no reason to believe f/s are false or misleading & client understands f/s are not for general purpose and readers could be mislead unless made aware of the limitations and limited involved by PA Stds: technical training, proficiency, due care, planning, supervision (dont need to be objective or independent) If false/misleading do not release f/s and withdraw Include Communication titled NTR: information compiled was provided by mgmt, audit was not performed, caution readers and do not express opinion, mark each pg - unaudited RPC and 5020 association guides PA to refer to independence