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ISA 400 Risk Assessments And Internal Control
ISA 400 Risk Assessments and Internal Control is one of the International Standards on Auditing. It serves to require the auditor to understand the client's accounting system and internal control system and to assess control risk and inherent risk. The objective is to determine the nature, timing and extent of substantive procedures in order to reduce audit risk to an acceptable low level. ISA 400 talks about the "walk through testing" or auditing in depth test. This standard was withdrawn in 2004, and has been replaced with the ISA 315, “Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement” and the ISA 330, “The Auditor’s Procedures in Response to Assessed Risks” See also * Control environment * Sarbanes-Oxley * Entity-Level Controls Entity-level controls are controls that help to ensure that management directives pertaining to the entire entity are carried out. They are the second level of a to understanding the risks ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
International Standards On Auditing
International Standards on Auditing (ISA) are professional standards for the auditing of financial information. These standards are issued by the International Auditing and Assurance Standards Board (IAASB). According to Olung M (CAO - L), ISA guides the auditor to add value to the assignment hence building confidence of investors. The standards cover various areas of auditing, including respective responsibilities, audit planning, Internal Control, audit evidence, using the work of other experts, audit conclusions and audit reports, and standards for specialized areas. Use of the ISAs * European Union: The Audit Directive of 17 May 2006 enforces the use of the ''International Standards on Auditing'' for all Statutory audits to be performed in the European Union. The Audit Directive of 17 May 2006 is important in order to ensure a high quality for all statutory audits required by Community law requiring all statutory audits be carried out on the basis of all international audi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Auditor
An auditor is a person or a firm appointed by a company to execute an audit.Practical Auditing, Kul Narsingh Shrestha, 2012, Nabin Prakashan, Nepal To act as an auditor, a person should be certified by the regulatory authority of accounting and auditing or possess certain specified qualifications. Generally, to act as an external auditor of the company, a person should have a certificate of practice from the regulatory authority. Types of auditors * External auditor/ Statutory auditor is an independent firm engaged by the client subject to the audit, to express an opinion on whether the company's financial statements are free of material misstatements, whether due to fraud or error. For publicly traded companies, external auditors may also be required to express an opinion over the effectiveness of internal controls over financial reporting. External auditors may also be engaged to perform other agreed-upon procedures, related or unrelated to financial statements. Most important ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Internal Control
Internal control, as defined by accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. A broad concept, internal control involves everything that controls risks to an organization. It is a means by which an organization's resources are directed, monitored, and measured. It plays an important role in detecting and preventing fraud and protecting the organization's resources, both physical (e.g., machinery and property) and intangible (e.g., reputation or intellectual property such as trademarks). At the organizational level, internal control objectives relate to the reliability of financial reporting, timely feedback on the achievement of operational or strategic goals, and compliance with laws and regulations. At the specific transaction level, internal controls refers to the actions taken to achieve a specific objective (e.g., ho ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Control Risk
Audit risk (also referred to as residual risk) as per ISA 200 refers to the risk that the auditor expresses an inappropriate opinion when the financial statements are materiality misstated. This risk is composed of: * Inherent risk (IR), the risk involved in the nature of business or transaction. Example, transactions involving exchange of cash may have higher IR than transactions involving settlement by cheques. The term ''inherent risk'' may have other definitions in other contexts.; *Control risk (CR), the risk that a misstatement may not be prevented or detected and corrected due to weakness in the entity's internal control mechanism. Example, control risk assessment may be higher in an entity where separation of duties is not well defined; and * Detection risk (DR), the probability that the auditing procedures may fail to detect existence of a material error or fraud. Detection risk may be due to sampling error or non-sampling error. Audit risk can be calculated as: :A ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Inherent Risk (accounting)
Inherent risk, in a financial audit, measures the auditor's assessment of the likelihood that there are material misstatements due to error or fraud in segment before considering the effectiveness of internal control. If the auditor concludes that a high likelihood exist, the auditor will conclude that inherent risk is high. See also *Inherent risk Inherent risk, in risk management, is an assessed level of raw or untreated risk; that is, the natural level of risk inherent in a process or activity without doing anything to reduce the likelihood or mitigate the severity of a mishap, or the amoun ... * Control risk References {{reflist * Jackson & Stent, 2010: Auditing Notes for South African Students (7th Edition) Auditing terms ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Substantive Procedures
A noun () is a word that generally functions as the name of a specific object or set of objects, such as living creatures, places, actions, qualities, states of existence, or ideas.Example nouns for: * Living creatures (including people, alive, dead or imaginary): ''mushrooms, dogs, Afro-Caribbeans, rosebushes, Nelson Mandela, bacteria, Klingons'', etc. * Physical objects: ''hammers, pencils, Earth, guitars, atoms, stones, boots, shadows'', etc. * Places: ''closets, temples, rivers, Antarctica, houses, Grand Canyon, utopia'', etc. * Actions: ''swimming, exercises, diffusions, explosions, flight, electrification, embezzlement'', etc. * Qualities: ''colors, lengths, deafness, weights, roundness, symmetry, warp speed,'' etc. * Mental or physical states of existence: ''jealousy, sleep, heat, joy, stomachache, confusion, mind meld,'' etc. Lexical categories (parts of speech) are defined in terms of the ways in which their members combine with other kinds of expressions. The syntacti ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Audit Risk
Audit risk (also referred to as residual risk) as per ISA 200 refers to the risk that the auditor expresses an inappropriate opinion when the financial statements are materiality misstated. This risk is composed of: * Inherent risk (IR), the risk involved in the nature of business or transaction. Example, transactions involving exchange of cash may have higher IR than transactions involving settlement by cheques. The term ''inherent risk'' may have other definitions in other contexts.; *Control risk (CR), the risk that a misstatement may not be prevented or detected and corrected due to weakness in the entity's internal control mechanism. Example, control risk assessment may be higher in an entity where separation of duties is not well defined; and * Detection risk (DR), the probability that the auditing procedures may fail to detect existence of a material error or fraud. Detection risk may be due to sampling error or non-sampling error. Audit risk can be calculated as: :AR ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Control Environment
A control environment, also called "Internal control environment", is a term of financial audit, internal audit and Enterprise Risk Management. It means the overall attitude, awareness and actions of directors and management (i.e. "those charged with governance") regarding the internal control system and its importance to the entity. They express it in management style, corporate culture, values, philosophy and operating style, the organisational structure, and human resources policies and procedures. See also * ISA 400 Risk Assessments and Internal Control *Entity-Level Controls Entity-level controls are controls that help to ensure that management directives pertaining to the entire entity are carried out. They are the second level of a to understanding the risks of an organization. Generally, entity refers to the ent ... External linksIFAC Represents 2 500 000 accountants in 120 countries Auditing Internal audit {{business-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Entity-Level Controls
Entity-level controls are controls that help to ensure that management directives pertaining to the entire entity are carried out. They are the second level of a to understanding the risks of an organization. Generally, entity refers to the entire company. Regulation surrounding entity-level controls Sarbanes-Oxley Act of 2002 As a result of several accounting and auditing scandals, congress passed the Sarbanes-Oxley Act of 2002. Section 404 of the act requires company management to assess and report on the effectiveness of the company's internal control. It also requires the company's independent auditor to attest to management's disclosures regarding the effectiveness of internal control. The act also created the Public Company Accounting Oversight Board (PCAOB). PCAOB Auditing Standard 2201 The Public Company Accounting Oversight Board (PCAOB) became the primary regulator of audits of publicly traded companies. In June 2007, the PCAOB adopted Auditing Standard 2201 (S ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
International Standards
international standard is a technical standard developed by one or more international standards organizations. International standards are available for consideration and use worldwide. The most prominent such organization is the International Organization for Standardization (ISO). Other prominent international standards organizations including the International Telecommunication Union (ITU) and the International Electrotechnical Commission (IEC). Together, these three organizations have formed the World Standards Cooperation alliance. Purpose International standards may be used either by direct application or by a process of modifying an international standard to suit local conditions. Adopting international standards results in creating national standards that are equivalent, or substantially the same as international standards in technical content, but may have (i) editorial differences as to appearance, use of symbols and measurement units, substitution of a point for a com ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
