Standardsare ideas about where the people are intended to use it to meet the quality andrequirement so the action can be morally correct and acceptable among theothers. In a scope of accounting career, there is a few standards thataccountant need to follow to meet the accepted statement as required. For theauditor, in process of complete the all task and audit report they need tocomply with the relevant standards by gaining the correct process in order tofulfil audit assurance. Generally, I need to follow the standards such asInternational Standards in Auditing (ISAs), Malaysia Financial and ReportingStandards (MFRS) and Malaysia Private Entities Reporting Standards (MPERS) arerequired for private company. There are some theoretical concept that I havebeen review during my academic period in TAF’s programme such as ISA 200Reasonable Assurance, ISA 200 Reasonable AssuranceThe theoretical concept relatedto my practical experience in auditor’s responsibilities that I have review is ISA200 Reasonable Assurance in accordance with ISAs is designed to providereasonable assurance that the financial statements taken as whole are free frommaterial misstatements. When the auditor reports on the effectiveness ofinternal control over financial reporting, the auditor is also responsible foridentifying material weaknesses in internal control.
Misstatements are usuallyconsidered material if the combined uncorrected errors and fraud in thefinancial statements would likely have changed the decisions of a reasonableperson using the statements.Eventhough it is such a difficult to measure a size of materiality, auditors areresponsible for finding all immaterial error and fraud. Assurance is a measureof the level of certainty that the auditor has obtained at the completion ofthe audit.
Reasonable assurance is presumably less than certainty or absoluteassurance and more than a low level of assurance. The reason why the auditor isresponsible for reasonable but not absolute assurance are most audit evidencefrom testing a sample of a population, accounting presentations contain complexestimates, which inherently involve uncertainty and can be affected by futureevents and fraudulently prepared financial statements are open extremelydifficult. According to ISA 240, there are two types of misstatement which isfraud and errors either type of misstatement can be material or immaterial.
Anerror is an unintentional misstatement of the financial statements whereasfraud is intentional. Regardingthe standards of ISA 200, the auditor must be prepared and performed with anattitude of professional scepticism in all aspect of the engagement.Professional scepticism is an attitude that includes a questioning mind and acritical assessment of audit evidence. ISA230 Audit DocumentationThenext theoretical concept thatrelated to my practical experience on academic period TAF’s programme that Ihave been review is ISA 230 audit documentation. Documentationis the auditor’s inspection of the client’s documents and records to prove theinformation that is or should be included in the financial statement.
Thedocument examine by auditor are the records used by the client to provideinformation for conducting its business in an organized manner because eachtransaction in the client organisations is supported by at least one document.According to ISA 230, audit documentation requires auditor to document theaspects of audit engagement as and when they happen. Each standard has certainrequirements that need to be documented, however, ISA 230 covers theresponsibility of the auditor’s documentation in general. Besides, as an auditor, they are required tomaintain an audit file in which he shall document the findings and factsconcerning audit engagement and the procedures applied by the auditor to achieveaudit objectives. The audit documentation is presented as evidence that theaudit was conducted in accordance with the requirements of the ISA in additionto the benefits of other documentation. The document of procedures, result ofaudit evidence and the conclusion reached on the basis of evidence shall bedone by auditor.
Then, the auditor must document how he ensures the complianceof ISAs in case if there is any doubt.Other than that, in ISA 230, auditdocumentation contains the set of standards that deal with working papers.Audit working papers include those papers and documents, which consist ofdetails about accounts, which are under audit.
It is a written, privatematerials, which an auditor prepares for each audit. It also describe the accountinginformation, which an auditor obtained from his client, the method ofexamination used, his conclusions and the financial statements. There are a fewsteps to prepare an audit working papers which are:1. A descriptive heading: It should include the client’sname, the working paper purpose, and the date under examination. 2. Indexing: Like a book, every working paper has a uniquepage number showing its place in the audit file depends on SALIHIN template.3.
Cross-referencing: To improve the efficiency, it must becross-reference the working papers to related and supporting working papers. 4. Tick marks: Use green tick marks as abbreviations forstandard auditing tasks or tick in the index of audit programme.5. The source of the information: Include documentsexamined or who are interviewed to gain evidence about the auditing matter athand.
6. A conclusion: Write a summary of the results of youranalysis and opinion of the validity of the client assertion.During the TAF’s programme, I need to do the documentation of TrailNetwork Sdn Bhd which is the first time I do that. When preparing the document,it should comply with ISA 230’s objective which is to provide the evidence ofthe auditor’s basis for a conclusion about the achievement of the overallobjectives of the auditor and also for the evidence that the audit was plannedand performed in accordance with ISAs and applicable legal and regulatoryrequirements.