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Preparation of A Time Budget

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Jessa Basadre
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17 views12 pages

Preparation of A Time Budget

Uploaded by

Jessa Basadre
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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8.

Preparation of a Time Budget


An estimate of the total hours an audit is expected to take. It is based
on the information obtained in the first major step in the audit, that is,
obtaining an understanding of the client. It takes into consideration
such thing as
a) the client’s soze as omficated by its gross assets, sales number of
employees.
b) location of client facilities
c) the anticipated accounting and auditing problems
d) the compentence and experience of staff available.
9. Assignment of Personnel to the
Engagement
Staff must, therefore, be assigned with that standard in mind.
A major consideration affecting staffing is the need for continuity from
year to year.

Another consideration is that the persons assigned be familiar with the


client’s industry.
Enagagement Team Conference
PSA 215 requires a discussion among tehe engagement team members
and a determination by the engagement partner of which matters are
to be communicated to those team members not involved in the
discussion.

The auditor shall include the following in the audit documentation of


the auditors understanding of the entity and its environment and the
assessment of the risks of material misstatement:
a) The significant decisions reached during the discussion among the
engagement team regarding the susceptibility of the entity’s
financial statements to material missatements due to fraud; and
b) The identified and assessed risks of material misstatement due to
fraud at the financial statement level and at the assertion level.
10. Scheduling of Work
Interim tests of certain financial statement balances. such as accounts
receivable, may also be performed, but this results in additional risk that
must be controlled by the auditors.

Performance of other substantive tests is scheduled near at, and after year-
end. consideartion should be given to such factors as:
a) Deadline for submitting fianl audit report and filing of income tax
returns
b) Ability of the client’s staff to submit required schedules
c) Other audit clients.
PLANNING A REPEAT ENGAGEMENT
The working papers in the previous year’s audit provide a wealth of
information useful in planning the recurring engagement.

The auditor should modify his approach to the audit for any changes in
teh client’s operations, internal control structure, or busniess
environment.
Special Consideration in the Audit of Small Entities
(PAPS 1005)

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