甘薯茎螟,前妻不上道,征婚交友网
|
The auditor must property document the audit plan. Most plant are formalised nowadays for all but the small assignments, by using a standard planning memorandum.
The control environment implies the overall attitude, awareness and actions of directors and management regarding the internal control system and its importance in the entity. The control environment has an effect on the effectiveness of the specific control procedures. To ensure that the effectiveness of the internal control system.
The function of the board of directors and its committees, management's philosophy and operating style., the entity's organisational structure and methods of assigning authority and responsibility, the management's control system including the internal audit function, personnel policies and procedures and segregation of duties.
"Control procedures" implies those policies and procedures in addition to the control environment which management has established to achieve the entity's specific objectives.
Reporting, reviewing and approving reconciliations, checking the arithmetical accuracy of the records. Controlling applications and environment of computer information systems, for example, by establishing controls over: changes to computer programmes access to data files.
Maintaining and reviewing control accounts and trial balances. Approving and controlling of documents. Evaluate internal data with external sources of information comparing the results of cash, security and stock counts with accounting record, limiting direct physical access to assets and records. Comparing and analysing the financial results with budgeted amounts.
In the audit of financial statements, the auditors are only concerned with those policies and procedures within the accounting and internal control systems that are relevant to the financial statement assertions. The understanding of relevant aspects of the accounting and internal control systems, together with the inherent and control risk assessments and other considerations, enables the auditors to identify the types of potential material misstatements that could occur in the financial statements, consider factors that affect the risk of material misstatements and design appropriate audit procedures.
Materiality concept is one of the most important concepts of auditing. The materiality concept should be considered by the auditor before making an opinion on the financial statements. The client or management of the entity has the responsibility to ensure that whether the financial statements reveal all relevant material information.
When material information is not disclosed or materially misstated, the financial statements will not present true and fair view. It will not be possible for the auditor to make an opinion on the financial statements without considering materiality concept. The opinion of chairman material is the matter of professional judgement and experience of the auditor.
The concept of materiality is reflected in the wording of the auditor standard audit report trough the phrase the financial statement give true and fair view or present fairly in all material respects. This is the manner in which auditor communicates the view of materiality to the users of auditor's report. There is a legal requirement to audit financial statement and present as opinion on those financial statements. If the auditors do not detect a material error then their opinion on the financial statements could be incorrect. There have only two owner/directors who will be the initial users of the financial statements
The directors will want to know if there is material an error resulting from any mistakes they may have made the auditors has a responsibility to the members to ensure that the financial statements are materiality corrects. The auditors are also other users of the financial statements who will include the taxation authorities and the bank who have made a loan to the company. They will want to see true and fair view accounts. The auditors must ensure that the financial statements are free from material misstatement to avoid any legal liability to third parties if they audit the financial statements negligently.
南通有限公司的审计风险评估Appraisal of Devro plc audit risk profile
Audit risk is the risk that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstatement. An auditor adopting a risk-based auditing approach obtains as understanding of an entity and its environment. Devro plc performs business in several countries and foreign exchange rate fluctuations could have a material adverse on operating business.
Inherent risk this is the susceptibility of an assertion to a misstatement that could be material, either individually or when aggregated with other misstatement, Devro Plc assuming that there were no related controls
Control risk is the risk that a misstatement that could occur in an assertion and that could be material, Devro Plc either individually or when aggregated with other misstatement, will not be prevented, or detected and corrected, on a timely basis by the entity's internal control. Customer and distribution in a large number of countries, the group has set up internal procedures and controls to mitigate the risk of non payment.
Inherent risk and control risk are the entity risks and they exist independently of the audit of the financial statement. The auditor is required to assess both of these components of audit risk as a basis for determining the level of substantive procedures to carry out.
Detection risk relates to the nature, timing and extent of the auditors procedures. It is the risk that the auditor will not detect a misstatement that exists in an assertion that could be material individually or when aggregated with other misstatement.
The audit risk model used by auditors, dictated that for a given level of audit risk, the acceptable level of detection risk bears an inverse relationship to the assessment of the risk of material misstatement.
Materiality refers to ISA 320 definition information is material if non disclosure could influence the economic decision of users taken on the basis of the financial statements. Materiality depends on the size of the item or error judged in the particular circumstances of its omission or misstatement. That is a legal requirement to statutory audit financial statements present an opinion on those financial statements.
Materiality is considered a relative concept because amount such as £183,125,000 revenue might be consider highly material for a small entity but would be clearly immaterial for a large multinational company with assets in billions. Devro Plc calculation of the preliminary judgement is based on the relative size (eg total assets and total revenue of the entity. There is no specific guidance and it is a matter of professional judgment. 4 rules size, financial
Materiality must be considered in aggregation and in totality. But also in indicial method Qualitative and Quantitative factors that may affect the assessment of materiality must be taken into consideration. Qualitative nature of business factors fraud and irregularities, small amounts that might violate covenants in the contract, non compliance with laws and regulations, amounts that might affect the trend in earning. Quantitative factors total assets, total revenue, net income before tax, gross profit, average of period income before tax.
The amounts recognised in the statement of financial position receivable represents only 0·7% (1080/160,010 million x 100) of total assets so is immaterial in monetary terms. However, the details of the transaction could make it material by nature.
The amount is outstanding from a company under the control of Devro Plc chairman. Readers of the financial statements would be interested to know the details of this transaction, which currently is not disclosed. Elements of the transaction could be subject to bias, specifically the repayment terms, which appear to be beyond normal commercial credit terms.
5-10% of pre tax profit
5-10% of total assets
1/2% of total revenues
Valuable or size rules are similar to single rules but they differ in that they present a range of promising different materiality level of companies of different sizes.
5 to 10% of Operating Profit if it is less than £50,000
5 to 10% of Operating Profit if it is between £50,000-£6,000,000
1/2% of Operating Profit if it is over £600,000,000
The single rule method would involve the auditor selecting as follow materiality amounts:
Single rule Computation Materiality Amount
5/10% of pre tax income 5/10%*£15,340,000 £7,670,000
5/10% of total assets 5/10%*£160,010,000 £80,005,000
1/2% of total revenues 1/2%* £183,125,000 £91,562,500
|
