The objective of the course is to examine review practical issues on how to use the PEG Audit forms in conducting audit engagements of smaller entities. In order to efficiently and effectively plan and execute small audit engagements, it is important to customize the standard forms to address the assessed risks of material misstatement. The course will examine techniques on how to identify these risks and design effective audit tests.
The course will focus on CASs and areas especially relevant to smaller entities, specifically CAS 240, 315, 320, 330 and 530, as well as techniques and strategies needed when auditing smaller and less complex entities when faced with over 500 “shall” requirements in the Canadian Auditing Standards.
Case studies will be used to illustrate how to:
• Document client acceptance and planning;
• Use the understanding of the entity to identify and assess risks of material misstatement;
• Summarize the identified risks at both the financial statement and assertion levels;
• Link the extent of audit testing to the assessed risks of material misstatement; and
• Use the PEG audit steps and forms to ensure the file documentation is easy to follow and meets professional standards.
Over the past couple of years, the focus of inspections and monitoring has moved away from risk assessment to examining the extent of audit testing and how the tests achieve their objective in reducing the risks to an acceptable level. The course will review the different types of audit tests (i.e. tests of control, tests of detail, threshold testing, coverage testing, etc.) and their use in coming up with a coherent audit strategy. We will also review the requirements of CAS 540, audit sampling, and how to apply different sampling techniques on smaller populations found in smaller entities.
The course is designed to focus on key issues and techniques relevant to smaller entities and assumes that participants have a solid understanding of the CAS requirements and the PEG Audit methodology. The course will not cover all relevant CASs, forms, etc. which may be necessary for all audit engagements and is not intended as an overall audit refresher course.