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They are very helpful indeed and have helped enhance my understanding.
Sir to add to this I have been reading articles on Acca’s website for f8 – Audit Risk,
I have been through the course notes as well.
But in relation to the article it states that ISA 315 Deals with the auditors responsibility to identify and assess the risks of material misstatement through understanding the entity,environment and internal controls.
It is then further broken down into 4 parts, I pretty much understand them but the terminology being used on part 1 has really confused me on – Put in exclamation marks below. Could you please kindly help once again?
Point 1)Perform Risk Assessment procedures in order to “provide a basis for the identification and assessment of the risks of Material Misstatements.”
Risk assessment procedures include:
Interviewing the finance director about problems changes, fraud.
Seeing what problems there had been previously by looking at last year’s audit file.
Walking around looking at the state of premises, machinery, stores, documentation
Analytical procedures.
Understanding the nature of the business and what is at risk (eg inventory in a jewellery shop).All of these procedures help the auditor to identify areas most at risk of material misstatement. Eg the FD might tell you that a new IT system had been implemented during the year so risk that balances were incorrectly transferred and also that staff make errors using the new system.
Where ever there are more risks, more audit work is needed to try to collect evidence that the FS do not contain material mistatements.
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