ISA315 and 330 were revised for audits of clients with year ends of December 2022 or later.

In order to assess for risks as part of a financial statements audit, one needs to understand the makings of a business. This will include learning about the entity, its environment / industry, legal framework, employee structure, nature of transactions and the internal controls that keep everything together.

You understand a business per ISA 315, so that you can more easily point out what areas of the financial statements are likely to contain misstatement. These very areas will be what is risky in a financial statements audit.

Once you’ve identified the areas of risk, you will need to plan your response, taking into consideration ISA 330’s revised requirements for what needs to be tested and how.

Several new concepts need to be understood: Inherent Risk Factors, Relevant Assertions,
Significant Classes of Transaction Account Balance and Disclosure (SCOTABD), Understand and Evaluate Controls versus Test Implementation of Controls, and Likelihood and Magnitude.

Course Objective:

Fundamentally the session will focus on planning and the considerations thereto, with the view to:

• Simplifying the relevant standards, highlighting key elements and
• Practically demonstrating how Draftworx approaches the planning phase of an audit of financial statements, explaining all relevant documents and describing how to complete each, applying the relevant planning related standards including ISA 315 and 330.
  

Course Content:

2022 Revised ISA 315 and 330 will be simplified relative to the following aspects:

• Identifying what you need to understand better about an entity and its environment and the financial reporting framework and therefore what you need to document
• Understanding your responsibility around internal controls, their design and implementation, and whether you need to do walkthroughs / test controls
• The effect of risks on the audit approach, and how to identify and assess risks based on the 2022 revised ISA 315 standard in the Draftworx template.
• How planned responses are to be set out based on revised ISA 330 in the Draftworx
  template.
• New concepts to be discussed include Inherent Risk Factors for assertion level risk identification, Relevant Assertions, Significant Classes of Transactions Account Balance Disclosure SCOTABD for determining controls understanding requirements and lastly the requirements around how to assess risk at the assertion level, namely likelihood and magnitude.
  

Documents worked through:

• Pre-engagement Activities:
  • Section 10: Engagement and Team Setup
  • Documents 10.00, 10.01, 10.02, 10.03, 10.04, 10.05, 10.10, 10.20, 10.25, 10.30
• Planning Activities:

  • Section 11: Risk Identification

  • Documents: 11.05, 11.10, 11.15, 11.20, 11.25

  • Section 12: Risk Identification

  • Documents: 12.05, 12.10, 12.15, 12.20, 12.25, 12.30, 12.35, 12.40, 12.45, 12.70, 12.80

  • Section 13: System Notes

  • Section 15, 16 and 17: Risk Assessment

  • Documents: 15.05, 16.05, 17.05, 17.95

  • Section 18 and 19: Other Planning Documents

  • Documents: 15.05, 16.05, 17.05, 17.95

  • Section 18 and 19: Other Planning Documents

  • Documents: 18.00, 18.05, 19.00, 19.05, 19.20, 19.25

• Execution Activities:

  • Section 20-60: Cycles and Components

  • Documents: Section 20 Journals / Related Parties / Contingent Liabilities

  • Documents: Section 30-60 Other Cycles