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Auditing and Assurance Services : Assignment

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Added on  2020-06-05

Auditing and Assurance Services : Assignment

   Added on 2020-06-05

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AUDITING AND ASSURANCESERVICES
Auditing and Assurance Services : Assignment_1
Table of ContentsINTRODUCTION...........................................................................................................................1Key changes to audit report, similarities and differences between PCAOB and IAASB............1Reasons/motivations for the change with critical examination...................................................3Outlining likely impact of audit reporting on audit practice........................................................4CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................4
Auditing and Assurance Services : Assignment_2
INTRODUCTIONIAASB is the leading accounting standard setting body that set high quality standardssatisfying public interest. It issued ISA 701 with respect to audit report, while, PCAOB is aprivate body that protect investors right by overseeing companies audit. Recently, it hadproposed several changes in the audit reporting requirement of companies in AS 3101. The keypurpose of the assignment is to identify key changes and examine similarities and differencesbetween ISA 701 and AS 3101. Moreover, it will critically examine the key issues and reasonsbehind proposing such changes in the standard along with its potential implication on auditpractices. Key changes to audit report, similarities and differences between PCAOB and IAASBRecently, in May 2016, US Public Company Accounting Oversight Board (PCAOB)release AS 3101 for auditors reports (in case of unqualified opinion), as per which, auditors needto disclose areas, considered as high audit risk in his report. However, IAASB (InternationalAuditing and Assurance Standards) revised its audit reporting standards in January, 2015.Following are the key changes introduced by PCAOB in AS 3101:Limiting communication of CAM in the audit report to the audit committeeIncorporating materiality element in the CAM Revised definition on CAM covering challenging, subjective and complex judgment ofauditorRequire publishing only the principal consideration in determination of whether a matteris CAM or notExpanding communication requirements by including description of how CAM has beenaddressed during audit The main difference between both the standards is PCABO is based on critical auditmatters (CAM) whereas ISA, 701 focuses on key audit matters (KAM). Here, CAM comprisesall the matters that arisen from the auditing of company’s financial statements such asmaterialistic information to the accounts & disclosure and challenging & subjective judgmentsneed to be conveyed to audit committee (Arens, Elder & Mark, 2012). However, KAM are1
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