AICPA读书笔记AUD之Planning for Risk（1） - AICPA论坛

Financial statement assertions. Management is responsible for the fair presentation of financial statements. In representing that the financial statements are fairly presented in conformity with generally accepted accounting principles, management implicitly or explicitly makes assertions relating to account balances at year-end (account balances), classes of transactions and events (transactions classes), and presentations and disclosures (disclosures).

Transactions Classes

Occurrence – Transactions and events that have been recordedpertain to the entity.

Existence–Assets, liabilities, and equityhave occurred and interests exist.

Occurrence–Disclosed events andtransactions have occurred.

Rights and obligations – The entity holds or controls the rights to assets, and liabilities are the obligations of the entity.

Rights and obligations–Disclosedevents pertain to the entity.

Completeness – All transactions and events have been recorded.

Completeness–All assets, liabilities, andequity interests have been recorded.

Completeness–All disclosures thatshould have been included have been included.

Accuracy–Amounts and other data relating to recorded transactions have beenrecorded appropriately.

Valuation and allocation–Assets, liabilities, and equity interests are included atappropriate amounts.

Accuracy and valuation –Information is disclosed fairly and atappropriate amounts.

Cutoff–transactions and events have been recorded in the correct accounting period.

Classification–Transactions and events have been recorded in the proper accounts.

Classification and understandability–Information is presented and described clearly.

注释: 认定是管理层对财务报表组成要素的确认、计量、列报做出的明确或隐含的表达。认定和审计目标密切相关，注册会计师基本职责就是确定被审计单位管理层对其财务报表的认定是否适当。

AR is the risk that the auditor may unknowingly fail to modify appropriately the opinion on materially misstated financial statements. The auditor should plan the audit so that overall audit risk is limited to a low level. AR includes:

1. Risk of Material misstatement(RMM)

The risk that the financial statements are materially misstated. It can be subdivided into:

a. Inherent Risk (IR)

Susceptibility of an assertion to a material misstatement assuming that there are no related controls. IR exists independently of the audit. The auditor cannot change this risk.

b. Control Risk (CR)

The risk that a material misstatement could occur in an assertion and not be prevented or detected on a timely basis by an entity's internal control. CR exists independently of the audit. The auditor cannot change this risk, but can change his/her assessment of the risk based on evident gathered during the audit.

(1) The stronger the system of controls, the greater the reliance that may be placed on it, and the fewer the substantive tests (or the lower the quality) required.

c. Detection Risk (DR)

The risk that the auditor will not detect a material misstatement that exists in an assertion. DR relates to the auditor's procedures. The auditor can change this risk by varying the nature, extent, or timing of audit procedures.

(1) As the acceptable level of DR deceases，the assurance provided from substantive tests should increase.

2. The Audit Risk Model

THE AUDIT RISK MODEL

Risk of Material

Misstatement (RMM)

(assessed by auditor)

Detection Risk (DR)

(controlled by auditor)

Risk of Material

Misstatement

Acceptable Level of

Detection Risk

Determine NET of Substantive Procedures

注释: 就像医生要依据病人的具体情况开出不同的处方药一样，审计师首先要知道客户的风险在什么地方，然后采取不同的风险应对措施。当注册会计师未能发现重大错报并出具了错误的审计意见时，就可能产生是否恪守应有的职业谨慎的法律问题。如果未恪守应有的职业谨慎，就属于审计失败，注册会计师负有过失责任。过失分为普通过失（没有完全遵守职业准则要求），重大过失（根本没有遵守职业准则要求进行审计）和欺诈（明知有重大错报，仍发表无保留意见），他们之间没有严格的界定，具体案例需要法院依据具体情况给予解释。

As the acceptable level of detection risk decreases an auditor may:

a. Reduce substantive testing by relying on the assessments of inherent risk and control risk

b. Postpone the planned timing of substantive tests from interim dates to the year-end

c. Eliminate the assessed level of inherent risk from consideration as a planning factor

d. Lower the assessed level of control risk from the maximum level to below the maximum.

Difficulty: Moderate

(b) The requirement is to determine a likely auditorreaction to a decreased acceptable level of detection risk.Answer (b) is correct because postponement of interimsubstantive tests to year-end decreases detection risk by reducingthe risk for the period subsequent to the performanceof those tests; other approaches to decreasing detection riskinclude changing to more effective substantive tests andincreasing their extent. Answer (a) is incorrect because increased,not reduced, substantive testing is required. Answer(c) is incorrect because inherent risk must be consideredin planning, either by itself or in combination withcontrol risk. Answer (d) is incorrect because tests of controlsmust be performed to reduce the assessed level of controlrisk.

Which of the following audit risk components may be assessed in non-quantitative terms?

(c) The requirement is to determine whether inherentrisk, control risk，and detection risk may be assessed innon-quantitative terms. Answer (c) is correct because all ofthese risks may be assessed in either quantitative terms such as percentages, or non-quantitative terms such as a rangefrom a minimum to a maximum..

C. Materiality and Tolerable Misstatement

Materiality is the magnitude of an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement.

1. Tolerable Misstatement

After determining a materiality for the various financial statements, the auditor then apportions the amount among the various accounts. This apportionment may be based on factors such as the relative size of various accounts and on professional judgment. The apportioned amount for each account is the tolerable misstatement.

2. Inverse Relationship Between Audit Risk and Materiality

There is an inverse relationship between audit risk and materiality. The risk of a very large misstatement may be low, whereas the risk of a small misstatement may be high. Also, the more material a misstatement is, the less likely it is that the auditor will not detect it.

注释: 重要性是审计学的一个基本概念，它取决于在具体环境下对错报金额和性质的判断。如果一项错报单独或连同其他错报可能影响财务报表使用者依据财务报表做出的经济决策，则该项错报是重大的。在计划审计工作时，在了解被审计及其环境的基础上，确定一个可接受的财务报表层次的重要性水平，然后确定各类交易、帐户余额及列报认定层次的重要性水平，以便确定近一步审计程序的性质，时间和范围，将审计风险降至可接受水平。在审计执行阶段，随着审计的推进，注册会计师应当及时评价计划阶段确定的重要性水平是否合理，根据环境变化进一步获取信息，修正计划的重要性水平，进而修改近一步审计程序的性质，时间和范围。

Question 4

In consideration of materiality for planning purposes, an auditor believes that misstatements aggregating $10,000 would have a material effect on an entity’s income statement, but that misstatements would have to aggregate $20,000 to materially affect the balance sheet. Ordinarily, it would be expected to detect misstatements that aggregate

a. $10,000

b. $15,000

c. $20,000

d. $30,000

Difficulty: Moderate

Explanations

(a) The requirement is to determine the appropriatelevel of materiality for planning purposes when $10,000would have a material effect on an entity's income statement,but $20,000 would materially affect the balance sheet.AU-C 320 (AU 312) states that the “audit should be designed

to obtain reasonable assurance about whether the financialstatements are free of materialmisstatement”. Because it willordinarily be difficult to anticipate during the planning stage

of an audit whether all misstatements will affect only onefinancial statement, the auditor is generally required to usethe lower financial statement figure for most portions of

planning. Therefore, answer (a), $10,000, is correct.Answers (b), (c), and (d) are all incorrect because they aredollar amounts which exceed the lowest level of materiality.

	Control risk	Detection risk	Inherent risk
a.	Yes	Yes	No
b.	Yes	No	Yes
c.	Yes	Yes	Yes
d.	No	Yes	Yes

Transactions Classes	Account Balances	Disclosures
Occurrence – Transactions and events that have been recordedpertain to the entity.	Existence–Assets, liabilities, and equityhave occurred and interests exist.	Occurrence–Disclosed events andtransactions have occurred.
	Rights and obligations – The entity holds or controls the rights to assets, and liabilities are the obligations of the entity.	Rights and obligations–Disclosedevents pertain to the entity.
Completeness – All transactions and events have been recorded.	Completeness–All assets, liabilities, andequity interests have been recorded.	Completeness–All disclosures thatshould have been included have been included.
Accuracy–Amounts and other data relating to recorded transactions have beenrecorded appropriately.	Valuation and allocation–Assets, liabilities, and equity interests are included atappropriate amounts.	Accuracy and valuation –Information is disclosed fairly and atappropriate amounts.
Cutoff–transactions and events have been recorded in the correct accounting period.
Classification–Transactions and events have been recorded in the proper accounts.		Classification and understandability–Information is presented and described clearly.

Risk of Material Misstatement	Acceptable Level of Detection Risk	Determine NET of Substantive Procedures
High (bad)	Lower	High
Low (good)	Higher	Low