50. Nature of checks carried out on checks. Some types of tests naturally provide better evidence of the effectiveness of controls than other tests. The following tests that the auditor could perform are presented in the order of evidence that he would normally submit, at least to the smallest: examination, observation, inspection of relevant documents, and re-audit. 7. As part of an integrated audit of the system of internal control over financial reporting and the financial statements, the statutory auditor should design his audit of controls to achieve the objectives of both audits simultaneously, thereby enabling analysts to keep abreast of ongoing developments in financial reporting by monitoring new products or types of transactions. actions taken by standards bodies, regulators and other groups; and information provided by companies on accounting policies and critical estimates. Section 2 of this reading discusses the purpose of financial reporting and the importance of accounting standards for the analysis and valuation of securities. Section 3 describes the roles of accounting bodies and supervisors, as well as several accounting standard-setters and regulators. Section 4 describes the International Financial Reporting Standards (IFRS) framework and the general requirements for financial statements. Section 5 compares IFRS and other information systems, and Section 6 discusses the importance of monitoring changes in accounting standards.
A summary of the main points concludes the reading. 38. When performing a step-by-step procedure, at points where significant processing operations take place, the auditor must interview the Company`s staff to understand what the procedures and controls prescribed by the Company require. These probing questions, combined with other review procedures, allow the auditor to gain a sufficient understanding of the process and identify key areas where the necessary control is lacking or not being designed effectively. In addition, survey questions that go beyond a narrow focus on the single transaction used as the basis for the review allow the auditor to better understand the different types of significant transactions handled by the process. 28. The statutory auditor shall identify the financial statements and material information and the relevant statements. Relevant financial statements are those that have a reasonable likelihood of containing misstatements that would result in material misstatement to the financial statements. For the purposes of this indicator, the term “senior management” includes the Chief Executive Officer and Chief Financial Officer who sign the Corporation`s certifications under section 302 of the Act, as well as any other member of senior management who plays a significant role in the Corporation`s financial reporting process. 3. The objective of the auditor in an audit of the system of internal control over financial reporting is to express an opinion on the effectiveness of the company`s system of internal control over financial reporting.
Since an entity`s system of internal control cannot be considered effective if there are one or more material weaknesses, the statutory auditor should plan and conduct the audit in such a way as to serve as the basis for expressing an audit opinion in order to obtain appropriate audit evidence sufficient to obtain reasonable assurance 5/ as to the existence of material weaknesses at the time specified in management`s assessment. A significant weakness in the system of internal control over financial reporting may exist even if the financial statements are not materially erroneous. 35. Based on the level of judgement required, the statutory auditor should either conduct the procedures himself to achieve the objectives of paragraph 34 or supervise the work of others who provide direct assistance to the auditor, as described in § 322 AU. 56. The additional evidence required to update test results from an interim date to the end of the Company`s year depends on the following factors: 22. The statutory auditor shall audit entity-level controls that are relevant to the statutory auditor`s conclusion as to whether the entity has an effective system of internal control over financial reporting.