Clarifying audit misconceptions
Audit inspectors frequently complain about firms that undertake audit work which falls short of acceptable benchmarks, explains Steve Collings.
Certainly during the course of lectures I have come across questions/assumptions that are not necessarily true in the course of audit work and I have put together a few of the more common audit areas which seem to crop up during the course of regulatory visits or cited by other experienced external file reviewers as those matters with which they are concerned.
The ‘hotspots’ are as follows:
- Analytical review
- Opening balances
- Written representations
- Emphasis of matter paragraphs
- Related parties
- Subsequent events
- Professional scepticism
- Going concern
Steve Collings is the audit and technical partner at Leavitt Walmsley Associates and the author of ‘Interpretation and Application of International Standards on Auditing’. He is also the author of ‘The AccountingWEB Guide to IFRS’ and ‘IFRS For Dummies’ and was named Accounting Technician of the Year at the 2011 British Accountancy Awards.