ACCA F8考試：ISA 315

ACCA F8考試：ISA 315

1. Understanding the Entity and Its Environment (ISA 315)

1.1 Steps

The relevant standard is ISA 315 Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and Its Environment.

The steps required to understand the entity and its environment, including its internal control, are:

Understand the entity and identify potential risks.

Understand internal control by considering the design and implementation of relevant internal controls to assess the potential risk of material misstatements (Session 9).

Consider whether the risks are of the type and magnitude that could result in a material misstatement of the financial statements.

Consider the likelihood that the risks could result in a material misstatement of the financial statements.

Relate the risks that have been identified to what can go wrong:

at the assertion level (e.g. occurrence, completeness, accuracy, cut-off and classification of transactions and events); and

at the overall financial statement level (e.g. when many assertions are affected and thus when risk is pervasive throughout the financial statements).

Plan, design and perform appropriate audit procedures in response to those identified risks.*

1.2 Methods

Obtaining an understanding of the entity and its environment, including its internal control, is a continuous, dynamic process of gathering, updating and analysing information throughout the audit cycle.

Risk-assessment procedures to obtain the necessary level of understanding include inquiry; observations; review, inspection and analysis; analytical procedures and benchmarks; and other procedures.

Prior year information (e.g. organisational structures, control environment, management attitude and actions to control breaches) can be used as long as it is up-to-date (i.e. check and update as required).

Information obtained from client acceptance procedures and other client engagements (e.g. review of interim financial statements) may also be relevant in obtaining an understanding of the entity.*

1.3 Audit Team Discussions

Discussions should be held among the senior and key members of the engagement team (at least) about the susceptibility of the financial statements to material misstatement, including fraud risk (see Session 11).*

By holding such discussions:

the more experienced engagement team members brief other members and share their knowledge and audit experience of the entity (the engagement partner must as a minimum be involved with the highest levels of the briefing process);

information can be exchanged about the entity's risks and how and where the financial statements might be susceptible to material misstatement;

the audit team obtains a better understanding of the potential for material misstatements resulting from fraud or error in the specific areas assigned to them; and

the audit team understands how the results of the audit procedures that they perform may affect other aspects of the audit, including the decisions about the nature, timing and extent of further audit procedures.

Such discussions must always be documented along with the decisions made and the effect on the audit approach.

Team members not involved in the discussions must be informed of the outcomes and specific effects on areas relevant to their responsibilities. This is usually achieved through a client planning memorandum (detailing, for example, the audit strategy, work programme, areas of risk) and verbal briefing by the team supervisor/manager.

All team members must have sufficient understanding of the entity to enable them to perform the work delegated to them and understand how it fits in and overlaps with the rest of the audit.