Audit Engagements - Auditing, Accounting Estimates (OC)

An overview of Revised CAS 540 Auditing Accounting Estimates and Related Disclosures to help practitioners be mindful of the standard and its requirements. Revised CAS 540 has significant changes from the extant standard and it is important that auditors understand the requirements to conduct a quality audit.

OBJECTIVE:
Revised standard CAS 540 Auditing Accounting Estimates and Related Disclosures is effective now.  It deals with the auditor’s responsibilities relating to accounting estimate and related disclosures.  It is critical for auditors to understand the new requirements and how to apply them in an audit.  

For entities of all types and sizes, management often must make estimates when monetary amounts are not supported by direct observable evidence.  The characteristics of accounting estimates have important implications in an audit as the effects of measurement uncertainty and inherent risk factors affect their susceptibility to misstatement. 

The course will provide an overview of Revised CAS 540 Auditing Accounting Estimates and Related Disclosures to help practitioners be mindful of the standard and its requirements. Revised CAS 540 has significant changes from the extant standard and it is important that auditors understand the requirements to conduct a quality audit.  Using discussion, case studies and examples, participants will be able to identify the auditor’s responsibilities related to auditing accounting estimates and related disclosures and apply the standards when designing and performing procedures for audit engagements.

The course will provide an overview of the flow of requirements of the revised standard and highlight changes from existing standards.  The material will cover the key aspects and provide an approach on meeting its requirements.  Required risk assessment procedures as well as guidance on the three possible testing approaches in performing further audit procedures on accounting estimates will be provided. Other requirements such as separating assessing inherent and control risk, performing stand-back procedures, and incorporating professional skepticism and meeting documentation standards will be addressed.

WHO WILL BENEFIT:
Practitioners who perform audit engagements and want to ensure they meet the requirements of Revised CAS 540 in an effective and efficient manner.  

LEARNING OUTCOMES:
By the end of the session, participants will be able to:

  • appreciate the requirements CAS 540 and the auditor’s responsibilities related to auditing accounting estimates and related disclosures,
  • define estimation uncertainty and explain the impact of subjectivity and complexity on identifying and assessing the risk of material misstatement related to estimates,
  • explain required risk assessment procedures,
  • assess inherent and control risk to assess the risk of material misstatement and determine required procedures when estimate assessed as a significant risk,
  • compare the three testing approaches and distinguish the circumstances where each one may be applicable,
  • plan and perform other required risk response procedures related to auditing estimates and related disclosure, and
  • explain file documentation requirements.

CONTENT:

  •  Introduction – Overview of CAS 540
  • Risk assessment procedures:  Requirements related to understanding the entity and its system of internal control related to estimates, performing a retrospective review
  • Identifying and assessing the risk of material misstatement:  Requirements related to identifying and assessing risks at the assertion level, separately assessing inherent and control risks, and performing required risk
  • assessment procedures when risk has been assessed as significant
  • Responses to assessed risk of material misstatement: Requirements related to the three testing approaches being subsequent events, testing management’s estimate and/or developing an auditor’s point estimate or range
  • Other considerations:  Requirements related to evaluating management bias, obtaining written representation from management, communicating with TCWG and documentation
  • Documentation requirements

COURSE LEADER: KIRSTEN ALBO, FCPA, FCA

When
12/15/2021 2:30 PM - 4:30 PM
Canada Central Standard Time
Where
Online Course

Personal Passport Eligibility

Corporate Passport Eligibility

 

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