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    At.2507 Understanding The Entity and Its Environment

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    This document discusses understanding the entity and its environment, which is a key part of the audit process. It outlines six key areas that auditors should obtain an understanding of, as well as procedures like inquiry, observation, inspection, and analytical procedures that can be used. The document also discusses the auditor's expectations when applying these procedures and provides an overview of how analytical procedures fit into the risk assessment and response aspects of an audit.

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    At.2507 Understanding The Entity and Its Environment

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    163 views26 pages
    This document discusses understanding the entity and its environment, which is a key part of the audit process. It outlines six key areas that auditors should obtain an understanding of, as well as procedures like inquiry, observation, inspection, and analytical procedures that can be used. The document also discusses the auditor's expectations when applying these procedures and provides an overview of how analytical procedures fit into the risk assessment and response aspects of an audit.

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    Auditing

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    At.2507 Understanding the Entity and Its Environment

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    This document discusses understanding the entity and its environment, which is a key part of the audit process. It outlines six key areas that auditors should obtain an understanding of, as well as procedures like inquiry, observation, inspection, and analytical procedures that can be used. The document also discusses the auditor's expectations when applying these procedures and provides an overview of how analytical procedures fit into the risk assessment and response aspects of an audit.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    163 views26 pages

    At.2507 Understanding The Entity and Its Environment

    Uploaded by

    awesome bloggers
    This document discusses understanding the entity and its environment, which is a key part of the audit process. It outlines six key areas that auditors should obtain an understanding of, as well as procedures like inquiry, observation, inspection, and analytical procedures that can be used. The document also discusses the auditor's expectations when applying these procedures and provides an overview of how analytical procedures fit into the risk assessment and response aspects of an audit.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 26

    Professional Review and

    Training Center (PRTC)

    Understanding the Entity and


    its Environment
    (AT.2507)

    Leomar R. Cabarles
    Effective
    Effective Professional
    Professional Professional
    Professional
    Audit
    Audit Judgment
    Judgment Skepticism
    Skepticism

    Understanding of
    Understanding of the
    the
    Entity, Environment,
    Entity, Environment, and
    and IC
    IC
    Extent of
    Extent of Understanding
    Understanding

    Professional
    Judgment

    ROMM
    Sufficient
    Understanding: Six
    Understanding: Six Key
    Key Areas
    Areas
    Procedures to
    Procedures to Obtain
    Obtain ‘Understanding’
    ‘Understanding’
    Overview of
    Overview of RAP
    RAP

    Understanding of the Entity, its environment,


    and its internal control
    RAP
    1. Inquiry
    2. Observation
    3. Inspection Basis for
    4. Analytical
    Procedures
    ROMM (F/S level and assertion level)
    Inquiry
    Inquiry
    Analytical Procedures
    Analytical Procedures
    Auditor’s Expectations
    Auditor’s Expectations
    Types of
    Types of Analytical
    Analytical Procedures
    Procedures
    Analytical Procedures
    Analytical Procedures Summary
    Summary
    Risk Conclusion and
    Assessment Risk Response Reporting
    Preliminary Substantive
    Procedure analytical analytical Concluding
    procedures procedures analytical procedures
    Understand the Detect
    entity and its material Conclude about F/S
    Objective
    environment misstatement
    Evidence of
    whether Consistent of F/S with
    Identify and assess
    Result material the auditor’s
    ROMM
    misstatement understanding
    exists
    Analytical Procedures
    Analytical Procedures Summary
    Summary

    Risk Conclusion and


    Assessment Risk Response Reporting

    Attention Yes No Yes


    directing?

    Required? Yes No Yes

    Level F/S Assertion F/S


    Observation and
    Observation and Inspection
    Inspection
    Prior Periods
    Prior Periods Information
    Information

    Update for
    changes

    Audit Files
    Audit Files

    Current
    Current Permanent/Continuing
    Permanent/Continuing
    Brainstorming
    Brainstorming

    • ROMM
    • Partner-led
    • Inform absentee members
    DIY Drill Answers
    DIY Drill Answers
    DIY Drill Answers
     end of AT.2507 

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