Auditing

Audit of Financial Statements

Phase I Phase II Phase III
Pre-engagement Activities and Gathering and Evaluating Issuing the Audit Report
Audit Planning Activities Audit Evidence

Pre-engagement Planning Internal Control Account Balance Audit Reporting

Activities Activities Assessment Activities Activities
Activities
- Investigate new - Obtain - Gather evidence about - Decide on the
and existing knowledge of - Gather the account balance appropriate
client the client’s evidence and peso amounts and audit report
- Obtain an business evaluate the related footnote (i.e.,
engagement - Obtain client’s internal disclosures unqualified,
letter preliminary control structure - Prepare audit working qualified,
- Assign partner, understanding of - Document the papers adverse or
manager and internal control assessed level of - Decide whether disclaimer)
staff to - Design a risk evidence is sufficient
engagement preliminary - Modify the - Evaluate the evidence
account balance audit program to and make audit decision
audit program final form - Document the decision
in working papers
Auditing

Audit of Financial Statements

Phase I Phase II Phase III
Pre-engagement Activities and Gathering and Evaluating Issuing the Audit Report
Audit Planning Activities Audit Evidence

Pre-engagement Planning Internal Control Account Balance Audit Reporting Activities

Activities Activities Assessment Activities
Activities Unqualified – fair
- Engagement - Client’s Substantive Testing presented in all
letter industry Test of Controls - Test of Details of material aspects
- Detailed environment - Inquiries of Transaction or Balance
understanding - Business and client personnel Analytical procedures Qualified –misstated
of business management - Inspection of or limited scope,
and overall - Accounting documents and Management Assertions materially but not
audit strategy and reporting records – persuasive
system - Observation of Existence
- Assessment application Completeness Adverse – misstated
of audit risk - Reperformance of Rights and obligation persuasively
- AR = IR x CR x application Valuation
DR Disclosure and Disclaimer – limited
Presentation scope persuasively
Auditing

Audit of Financial Statements

Phase I Phase II Phase III
Pre-engagement Activities and Gathering and Evaluating Issuing the Audit Report
Audit Planning Activities Audit Evidence

Pre-engagement Planning Internal Control Account Balance Audit Reporting Activities

Activities Activities Assessment Activities
Activities Unqualified – fair
- Engagement - Client’s Substantive
Substantive Testing
Testing presented in all
letter industry Test of Controls - Test of Details
Details of
of material aspects
- Detailed environment - Inquiries of Transaction
Transaction or
or Balance
Balance
understanding - Business and client personnel Analytical
Analytical procedures
procedures Qualified –misstated
of business management - Inspection of or limited scope,
and overall - Accounting documents and Management Assertions materially but not
audit strategy and reporting records – persuasive
system - Observation of Existence
- Assessment application Completeness Adverse – misstated
of audit risk - Reperformance of Rights and obligation persuasively
- AR = IR x CR x application Valuation
DR Disclosure and Disclaimer – limited
Presentation scope persuasively