1. Completing the Audit and Post Audit Responsibilities

2. The Sequence of Audit Accepting the audit engagement/appointment
Understanding the industry and the business
Tests of controls and substantive tests for the following transactions cycles:
The revenue cycles
The expenditure cyclest
The Production Cycles
Auditing the HRM/Payroll Cycles
Auditing the Investing and Financing Cycles
Auditing the Investments and Cash Balances
Completing the audits and reporting the audit

3. Completeing the Audit Consist of three main things:
Completing the field work
Evaluating the findings
Communicating with the client

4. Completing the Field Works
Making subsequent event review
Reading minutes of meetings
Obtaining evidence concerning litigation, claims, and assessments
Obtaining client representation letter
Performing analytical procedures

5. Evaluating the Findings
Making final assessment of materiality and audit risk
Evaluating going concern
Making technical review of financial statements
Formulating opinion and drafting audit report on the financial statements
Formulating opinion and drafting audit report on internal controls over financial reporting.
Making final review (s) of working papers.

6. Communicating with the Client
Communicating internal control matters
Communicating matters pertaining to conduct of audit
Preparing management letter

7. Postaudit Responsibilities
Subsequent events between report date and issuance of report.
Discovery of facts existing at report date.
Discovery of omitted procedures.

8. Completing the Fieldwork
Subsequent Events Review
Subsequent events are events that occur after the balance sheet dates but prior to the issuance of the financial statements and the auditor’s report.

9. Completing the Fieldwork
Illustration of Subsequent Events
Balance sheet
Date
Dec. 31, X1
Report issuance
date
March 15, X2
End of field work
(report date)
March 1, X2
Subsequent events
Subsequent events period
(the responsibility of auditor
only to the events in this
period)

10. Completing the Fieldwork
Types of Subsequent Events
Type 1: require adjustment of the financial statements, i.e. settlement of recorded year-end estimated liabilities at different amount than recorded.
Type 2: require disclosure of the financial statements, i.e. issuance of long-term bonds or casualty losses resulting from fire or natural disaster.

11. Completing the Fieldwork
Auditing Procedures
Performing year-end substantive tests such as cut-off tests and the search for unrecorded liabilities.
Read the latest available interim financial statements and compare them with the statements being reported on.
Inquire of management having responsibility for financial and accounting matters about:

12. Completing the Fieldwork
Substantial contingent liabilities or commitments existing at the balance sheet date or date of inquiry.
Significant changes in capital stock, long-term debt, or working capital to the date of inquiry.
The current status of items previously accounted for on the basis of tentative, preliminary, or inconclusive data.

13. Completing the Fieldwork
Unusual adjustments since the balance sheet date.
Read minutes of meetings of directors, stockholders, and other appropriates committees.
Inquire client’s legal counsel concerning litigation, claims, and assessments.

14. Completing the Fieldwork
Obtain letter of representation from about subsequent events that would, in its opinion, require adjustment or disclosure.
Make additional inquiries or perform additional procedures considered necessaries in the circumstances.

15. Completing the Fieldwork
The Effects of Subsequent Events
The effect of the subsequent events to auditor’s opinion or conclusion depend on the level of materiality of the events.
The failure to record or properly disclose the subsequent events in financial statements will result in a departure from the auditor’s standard report.

16. Completing the Fieldwork
Reading Minutes of Meeting
The minutes of meeting of stockholders, the board of directors and its subcommittees may contain matters that have audit significance, i.e. issuance of bonds, treasury stock, payment of cash dividend, discontinuance of a product line etc. The reading should be documented in the working papers.

17. Completing the Fieldwork
Obtaining Evidence Concerning Litigation, Claims, and Assessments (LCA) This procedures aimed to ensure the possible existence of loss contingency (gain contingency normally not recorded – due to conservatism principle). Contingency is an existing condition, situation, or set of circumstances involving uncertainty as to possible gain or loss.

18. Completing the Fieldwork
Considering the Evidence of LCA
The existence of a condition, situation, or set of circumstances indicating an uncertainty as to the possible loss to an entity arising form LCA.
The period in which the underlying cause for legal action occurred.
The degree of probability of an unfavorable outcome.
The amount of range of potential loss.

19. Completing the Fieldwork
Letter of Audit Inquiry
An auditor normally does not possess sufficient legal skills to make an informed judgment about all LCAs, therefore “a letter of audit inquiry” to the client’s lawyer(s) will be the primary means of corroborating information. The refusal of the lawyer to respond the letter will be as a limitation of audit scope.

20. Completing the Fieldwork
Obtaining Client Representation Letter
Representation letter is part of evidential matter.
It is used to confirm oral representation.
It may complement of other auditing procedures, however in some cases, it may be the primary source of audit evidence, i.e. for the decision of discontinuing certain product line.

21. Completing the Fieldwork
Content of Representation Letter
Management’s responsibility for the financial statements.
Completeness of information and evidence furnished to the auditor.
Issues regarding revenue recognition, accounting estimates, and disclosures.
Subsequent events.

22. Performing Analytical Procedures
The procedures involve the use of ratios and other comparative techniques as an overall (or final) review of the financial statements.
The procedures should be:
Applied to critical audit areas identified during the audit.
Based on financial data after all audit adjustments and reclassification have been recognized.
Compare the ratio with the expected ratio or with other comparable ratios.

23. Evaluating the Findings
Final Assessment of Materiality and Audit Risk
Assessment components:
Uncorrected misstatements specifically identified through substantive tests of detail of transactions and balances (referred to as known misstatement)
Projected uncorrected misstatements estimated through audit sampling techniques.
Estimated misstatements detected through analytical procedures and quantified by other auditing procedures.

24. Evaluating the Findings
Final Assessment of Materiality and Audit Risk
The total of the above potential misstatement for an account is called likely misstatement.
The sum of the likely misstatements in all accounts is called aggregate likely misstatement.
The above estimated misstatement will be used as a basis to assess the materiality and audit risk.

25. Evaluating the Findings
Evaluating Going Concern
Evaluation not exceed one year beyond the date of the financial statements. Information that would raise the substantial doubt about the going concern assumption relates to the entity’s inability to continue to meet its obligations without substantial disposition of assets.

26. Evaluating the Findings
Evaluating Going Concern
The steps need to be done:
Obtain information about management’s plans to mitigate the effect of such conditions or events.
Assess the likelihood that such plans can be effectively implemented.

27. Evaluating the Findings
Evaluating Going Concern
When finally auditor concludes that there is a substantial doubt about a going concern, the auditors should:
Consider the adequacy of disclosure about the doubt of the going concern for a reasonable period of time.
Include an explanatory paragraph in the audit report to reflect his or her conclusion.

28. Thank You