Microsoft Word Audit Quality-Framework Final vs 20140214
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| Appendix 2 47 43. Expertise may be obtained either from within the audit firm or from external sources. If specialists or experts are involved, it is important, as with other members of the engagement team, that their work is appropriately directed, supervised and reviewed. 44. The appropriate development of professional knowledge and skills begins with the initial professional development of the aspiring professional accountant. 5 Then, further specialization by the professional accountant to perform the role as an auditor is achieved through continuing professional development and additional auditing work experience. Continuing professional development of professional competence and lifelong learning are critical if auditors are to continue to meet the expectations of their clients and the public. 6 1.4.2 Partners and Staff Understand the Entity’s Business 45. A sound understanding of the entity, its business and the industry in which it operates is key to the auditor being able to assess the risks of material misstatement in the financial statements to appropriately focus audit procedures and to evaluate the findings from them. It is also necessary for the exercise of professional skepticism and the ability to make appropriate audit judgments. 46. Industry knowledge, including an understanding of relevant regulations and accounting issues, can be especially important for clients in, for example, the financial services industry. However, it is important that knowledge areas are not so narrow that they prevent the auditor from seeing broader issues. Auditors can acquire general business knowledge from undertaking non-audit work and from exposure to different clients in different industries. This allows them to stand back from the specifics of a particular entity’s business and reflect upon their broader knowledge of business issues, risks, and control systems. 47. Audits of smaller entities are often conducted on site by experienced personnel who have been involved with the entity for a number of years. While such personnel usually have a good knowledge of the entity’s business, there may be threats to their objectivity and professional skepticism. 1.4.3 Download 1.81 Mb. Share with your friends:
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