Annual Audit Manual

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7001 Introduction
Dec-2011

7001 Introduction

In This Section

Definitions

7000 series of topics

Overview

This section explains:

  • The objective of the auditor in terms of responding to identified and assessed risks of material misstatement
  • The topics discussed in the OAG Audit 7000 series of topics

CAS Objective

The objective of the auditor is to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement, through designing and implementing appropriate responses to those risks (CAS 330.3).

Definitions

CAS Requirement

For purposes of the CASs, the following term has the meaning attributed below:

Substantive procedure – An audit procedure designed to detect material misstatements at the assertion level. Substantive procedures comprise (CAS 330.4(a)):

(i). Tests of details (of classes of transactions, account balances, and disclosures); and

(ii). Substantive analytical procedures.

7000 series of topics

OAG Guidance

This section of OAG Audit explains:

  • How we develop the substantive test plan by determining the level of evidence required from a substantive procedure (OAG Audit 7011).
  • The requirement to evaluate the sufficiency and appropriateness of audit evidence (OAG Audit 7021) and how we may use taking stock meetings as part of this process (OAG Audit 7022).
  • How we may use substantive analytical review (OAG Audit 7030) and tests of details to obtain our audit evidence (OAG Audit 7040).
  • The use of external confirmations as a source of audit evidence (OAG Audit 7051), specifically bank confirmations (OAG Audit 7054) and accounts receivable confirmations (OAG Audit 7055).
  • The CAS requirements in relation to physical inventory observations (OAG Audit 7061) and the audit of accounting estimates (OAG Audit 7071).