审计学：一种整合方法(9)课件.ppt

1、9-1Materiality and RiskChapter 9Learning Objective 1Apply the concept of materialityto the audit.MaterialityIt is a major consideration in determiningthe appropriate audit report to issue.MaterialityThe auditors responsibility is to determinewhether financial statements arematerially misstated.If th

2、ere is a material misstatement,the auditor will bring it to the clientsattention so that a correction can be made.Steps in Applying MaterialityPlanningextentof testsStep1Set preliminary judgmentabout materialityStep2Allocate preliminaryjudgment aboutmateriality tosegmentsSteps in Applying Materialit

3、yEvaluatingresultsStep3Estimate totalmisstatement in segmentStep4Estimate thecombined misstatementCompare combinedestimate with judgmentabout materialityStep5Learning Objective 2Make a preliminary judgmentabout what amounts toconsider material.Set Preliminary Judgment About MaterialityThis prelimina

4、ry judgment is the maximumamount by which the auditor believes thestatements could be misstated and still notaffect the decisions of reasonable users.Auditors decide early in the auditthe combined amount of misstatementsof the financial statements that wouldbe considered material.Factors Affecting J

5、udgmentMateriality is a relative ratherthan an absolute concept.Bases are needed forevaluating materiality.Qualitative factors alsoaffect materiality.GuidelinesAccounting and auditing standardsdo not provide specific materialityguidelines to practitioners.Professional judgment is to be usedat all ti

6、mes in setting and applyingmateriality guidelines.Learning Objective 3Allocate preliminary materialityto segments of the auditduring planning.Allocate Preliminary Judgment About Materiality to SegmentsThis is necessary because evidence isaccumulated by segments rather thanfor the financial statement

7、s as a whole.Most practitioners allocate materialityto balance sheet accounts.SAS 107(AU 312)Learning Objective 4Use materiality to evaluateaudit findings.Estimated Total Misstatement and Preliminary JudgmentCashAccounts receivableInventoryTotal estimated misstatement amountPreliminary judgment abou

8、t materiality$4,000 20,000 36,000$50,000$2,000 12,000 31,500$45,500$N/A 6,000 15,750$16,800$2,000 18,000 47,250$62,300TolerableMisstatementKnownMisstatementand DirectProjectionSamplingErrorTotalAccountEstimated Misstatement AmountN/A=Not applicableCash audited 100 percentEstimated Total Misstatement

9、 and Preliminary JudgmentNet misstatements in the sample($3,500)Total recorded population value($450,000)Total sampled($50,000)=Direct projection estimate of misstatement($31,500)Learning Objective 5Define risk in auditing.RiskAuditors accept some level of riskin performing the audit.An effective au

10、ditor recognizes thatrisks exist,are difficult to measure,and require careful thought to respond.Responding to risks properly is criticalto achieving a high-quality audit.Risk and EvidenceAuditors gain an understanding of theclients business and industry andassess client business risk.Auditors use t

11、he audit risk model to furtheridentify the potential for misstatementsand where they are most likely to occur.Illustration of Differing Evidence Among CyclesSales andcollectioncycleAcquisitionand paymentcyclePayroll andpersonnelcycleInherentriskAMediumHighLowControlriskBMediumLowLowAcceptableaudit r

12、iskCLowLowLowPlanneddetection riskDMediumMediumHighIllustration of Differing Evidence Among CyclesInventory andwarehousingcycleCapital acquisitionand repaymentcycleInherentriskAHighLowControlriskBHighMediumAcceptableaudit riskCLowLowPlanneddetection riskDLowMediumLearning Objective 6Describe the aud

13、it risk modeland its components.Audit Risk Model for PlanningPDR=AAR (IR CR)PDR=Planned detection riskAAR=Acceptable audit riskIR=Inherent riskCR=Control riskwhere:Learning Objective 7Consider the impact ofengagement risk onacceptable audit risk.Impact of Engagement Risk on Acceptable Audit RiskAudi

14、tors decide engagement risk and usethat risk to modify acceptable audit risk.Engagement risk closely relates to clientbusiness risk.Factors Affecting Acceptable Audit Risk The degree to which external usersrely on the statements The likelihood that a client will havefinancial difficulties after thea

15、udit report is issued The auditors evaluation of managements integrityMethods Practitioners Use to Assess Acceptable Audit RiskMethods Used to AssessAcceptable Audit RiskExternal usersreliance onfinancialstatementsExamine financial statementsRead minutes of the boardExamine form 10KDiscuss financing

16、 planswith managementFactorsMethods Practitioners Use to Assess Acceptable Audit RiskLikelihoodof financialdifficulties Analyze financial statementsfor difficulties using ratiosExamine inflows and outflowsof cash flow statementsManagementintegritySee Chapter 8 for clientacceptance and continuanceMet

17、hods Used to AssessAcceptable Audit RiskFactorsLearning Objective 8Consider the impact of severalfactors on the assessmentof inherent risk.Factors Affecting Inherent Risk Nature of the clients business Results of previous audits Initial versus repeat engagement Related parties Nonroutine transaction

18、s Judgment required to correctly recordaccount balances and transactions Makeup of the population Factors related to fraudulent financial reporting Factors related to misappropriation of assetsLearning Objective 9Discuss the relationship ofrisks to audit evidence.Relationship of Factors Influencing

19、Risks to Risks and Risks to Planned EvidenceD=Direct relationship;I=Inverse relationshipFactorsinfluencingrisksAcceptable audit riskPlanneddetectionriskPlannedauditevidenceInherentriskControl riskIDIIDIDRelationship of Factors Influencing Risks to Risks and Risks to Planned Evidence The engagement m

20、ay requiremore experienced staff The engagement will be reviewedmore carefully than usual Auditors can change the auditto respond to risksAudit Risk for SegmentsTolerable Misstatement,Risks,and Balance-related Audit Objectives It is common to assess inherent and controlrisk for each balance-related

21、audit objective It is not common to allocate materialityto objectivesMeasurement LimitationsOne major limitation in the application of theaudit risk model is the difficulty of measuringthe components of the model.Relationships of Risk to EvidenceAcceptableaudit riskInherentriskControlriskPlanneddete

22、ctionriskAmount ofevidencerequiredSituationHighLowLowMediumHighLowLowHighMediumLowLowLowHighMediumMediumHighMediumLowMediumMediumLowMediumHighMediumMedium 1 2 3 4 5Tests of Details of Balances Evidence Planning WorksheetAuditors develop various types of worksheetsto aid in relating the consideration

23、s affectingaudit evidence to the appropriateevidence to accumulate.Learning Objective 10Discuss how materiality and riskare related and integrated intothe audit process.Relationship of Tolerable Misstatement and Risks toPlanned EvidenceD=Direct relationship;I=Inverse relationshipAcceptableaudit risk

24、InherentriskControlriskTolerablemisstatementPlanneddetection riskPlannedaudit evidenceIDIIIIDDAudit Risk Model for PlanningAcAR=Achieved audit riskIR=Inherent riskCR=Control riskAcDR=Achieved detection riskwhere:Audit Risk Models for Planning Evidence and Evaluating ResultsAcceptableauditriskInheren

25、triskControlriskAchieveddetectionriskSubstantiveauditevidenceAchievedauditriskCompareDIDDD=Direct relationshipI=Inverse relationshipRevising Risks and EvidenceThe auditor must revise the originalassessment of the appropriate risk.The auditor should consider the effectof the revision on evidence requirements,without the use of the audit risk model.9-43End of Chapter 9