Determine the flow of documents and extent of controls

Prepare comprehensive record for evaluation of the systems.

Prepare and send a report to management identifying weakness and recommending improvement.

Report to member is the end product which auditors express their opinion of the accounts.

To review internal financial control

To review internal control and risk management systems

To monitor and review the effectiveness of internal audit

To make recommendation on the appointment of external auditors

To approve the remuneration and terms of engagement of external auditors

To review and monitor the independence and objectivity of the external auditors and the effectiveness of the audit process.

To develop and implement policy on the engagement of the external auditor to supply non-audit services.

Discussing among the engagement team

Management’s assessment of risk

Management’s identifying and responding to risk

Management’s communication to governances and employee

Question management if they aware of any actual, suspected or alleged fraud

If there are internal auditors, external auditors should ask them if they aware of actual, suspected, or alleged fraud, obtain their view about risk of fraud, and procedures performed

Make enquiries to other operating personnel not involving in governance.

Obtain an understanding of how those governance oversights the processes of identifying and responding to fraud & internal control in place.

Make inquiries to governance if they aware of the actual, suspected, or alleged fraud.

Consider unusual or unexpected relationships

Consider if other information obtained risks

Detect fraud by being mindful when carry out work

Provide auditors with access to all documents

use general accept auditing techniques

investigate if any suspicious

act honestly and carefully when making judgment

Duty to carry out the work required with Reasonable expediency (方便)

Fit (competence and capacity) and proper (character and suitability) persons

Works is conducted Properly with professional integrity

Technical standards (eg. ISAs)

Maintain an appropriate level of Competence (CPD)

Investigation of complaints against members

Compulsory professional indemnity (损害赔偿) insurance In each visit of the regulatory body to monitor the auditors should be as following:

Proper structure of audit approach

Carefully instituted quality control procedures

Ethical guidelines

Technical excellence

Fit and proper criteria

Peer review (audit files are review by another partner in audit firm)

Hot review is carried out before report is signed by peer.

Cold review is carried out after report is signed by independence person

Sufficiently documented

Issues resolved and reflected in audit conclusion

Objectives were achieved

Essential procedures

Objectivity: unbiased, conflict of interest, undue influence of the others or business judgment.

Professional Competence and due care: maintain professional knowledge on current development in practice, legislation, and techniques, act diligently or thoroughly and in accordance with standard.

Confidentiality: respect the confidentiality of information, not disclosed information to third parties.

Self-review eg. Review by the same person

Advocacy

Familiarity eg. long association, acceptance of gift

Valuation services

Taxation services

Internal audit services

Corporate finance services

IT services

Temporary staff cover

Public duty

Legal or professional right or duty

Engagement economic

Risk

Relationship

Auditors’ responsibilities

Management’s responsibilities

Finance reporting framework management adopted

Form of any report to be issued by auditors

Inherent limitation of an audit that some material misstatement may remain undiscovered

Revise or special term of engagement

Change of senior management

Significant change in the nature or size in client business

Legal requirements

Change in the financial reporting framework

Relationship with recent developments

Degree of subjectivity in financial information

Unusual transaction

Management intervention

Complex accounting principles or calculation

Manual intervention

Opportunity for control procedures not to be allowed

Significant transaction with a related party

Emphasizing to audit staff to maintain professional skepticism

Assigning additional or more experienced staff to the audit team

Using experts

Providing more supervision

Incorporating more unpredictability into the audit procedures

Detailed further audit procedure

Tests of controls to obtain sufficient and appropriateness audit evidence

Reperformance and inspection are useful procedure

Substantive procedures (on material items)

Analytical procedures

Large volumes of predictable transactions

Other procedures (tests of detail)

Class of transactions, account balance and disclosure

Agreeing FS to the underlying accounting records

Examining material journal entries

Examining other adjustments made in preparing the financial statements

Assess the risks of material misstatements

Limitation of accounting system and internal control (accounting record may not full of detail and accounting system may be operated by person who do not full understand of system)

There is collusion which directors and staffs do not tell the true

Audit evidence just indicate a probable not a certain.

Materiality

Past experience

Errors mean breach the statutory requirements

Critical point errors (loss in profit)

Actuarial calculation of liabilities associated with insurance contracts or employee benefit plan, environment liabilities, clean-up costs, contracts, laws and regulations

Discussion with that expert

Discussion with other auditors expert familiar with

Knowledge of qualifications, membership of professional body or industry association, license to practice, or other form of external recognition

Published papers or book written by that expert

The roles and responsibilities of auditor and expert

The nature, timing and extent of communication between auditors and expert

Assumption and method used

When work is carried out

The reason for any changes in assumption and method

Examine the financial & operational information

Review of economy, effectiveness, and efficiency

Review of compliance with laws and regulations

Technical competence – technical training

Professional due care – properly planned, supervised, reviewed and documented

Auditing through computer: examine the detail processing routine of control in the system if adequate, and this should use Computer Assisted Audit Technique (CAAT)

Comparison programs – compare program’s version

Interactive software – online system’s information

Controls are less effective than they actually are or test of details that a material error exists when it does not – this is risk of Audit efficiency.

They provide as reference for audit problems encountered.

They are invaluable in the event of litigation against them by either the client or some third party.

They are not only assisting in the control of current audit but well for planning and control of future audit.

The results of the audit procedures performed, and the audit evidence obtained;

It will be neater and easier to review

Save time, computer will summarize the key analytical information

Standard form can be called up on the screen

They promptly recorded at the correct amount, correct account, and proper accounting period.

Access to assets is proper authorized

Recorded assets are compared with the existing assets.