End of audit tasks
There are many audit tasks that are tackled towards the end of the engagement.
Assessing related parties
Evaluating subsequent events
Evaluating going concern
Final analytical procedures
Negotiating adjustments with the client
Related parties
Evaluating subsequent events
An overview of ISA/ASA560 on subsequent events
The basic structure for analysing subsequent events
Then some worked examples
Another worked example of subsequent events from an online student study program that I used to run
Evaluating going concern
As part of our reporting we have to determine whether the client will continue as a going concern over 12 months from the date of the audit report. ASA570 contains clear instructions on the exact steps you should take.
Run your analytical procedures again
After you’ve found all of the misstatements, you should run your analytical procedures (that you did at the start of the audit over the general accounts) again. Why? Because this is your last chance to identify any misstatements – if you see any unusual fluctuations that you cannot explain – they will be highlighted here and you have a last chance to go an investigate.
Negotiating adjustments with management
Textbooks don’t talk much about the fact that the audit partner will negotiate with the CFO about what adjustments will be made to the financial statements. Remember – the auditor cannot adjust the financial statements or the notes to the accounts – we can only recommend adjustments to management and those charged with governance.
I do have planned for 2019 a video about this negotiation process – but in the mean time, if you feel like reading an academic research paper – this is a solid one – Hatfield, Agoglia and Sanchez (2007)
(Video forthcoming)
The final step is to issue the audit opinion.