12. audit completion

Audit

Completion StageBY

Atta-ur-Rahman Arif

INTRODUCTION•Refers to those steps which are taken

by the auditor after the routinechecking and verification ofaccounting records has beencompleted, in order to enable him towind-up his examination and report.

•Completion stage normally involvesthe following activities:

COMPLETION PROCEDURE

1. Review the Post balance sheet events2. Financial statement review3. Obtaining letter of representation4. Sending letter to management5. Forwarding points for consideration at

subsequent audit6. Maintaining errors and omission

summery


1. POST BALANCE SHEET EVENTS

Those events, favorable or unfavorable, thatoccurs between the Balance Sheet date and thedate on which the financial statement areauthorized to issue are called Post BalanceSheet Events. Events classified into twocategories:

i, Those events which provide furtherevidence of conditions that existed at thebalance sheet date called Adjusting Events.


ii.Those events that are indicative ofconditions that arose subsequent to thebalance sheet date called Non-AdjustingEvents.

▫ The auditor should perform the proceduresdesigned to obtain sufficient audit evidencethat all events up to the date of the auditor’sreport that must require adjustments, ordisclosure in, the financial statement havebeen identified.


2. Review of Financial Statement

• The auditor should review the financial statement insuch a manner that he may be able to:

▫ draw conclusions from the order evidence obtained byhim

▫ to give him a reasonable basis of his opinion on thefinancial statements.

• The auditor should satisfy himself as to whether:

i. Financial Statement have been drawn up inaccordance with the GAAP which are consistent andappropriate to the enterprise.


ii. The results of operation, states of affairs ofthe financial position, other informationreflected in the financial statement andthe directors report are comparable.

iii. All matters have been properly disclosedand classified.

iv. Financial Statement comply to thestatutory requirements to the regulationand constitution of the enterprise.


3. Obtaining Letter of Representation

▫ It confirming the various representation made bymanagement in respect of matters which are materialand for which the auditor has not been able to obtainsufficient independent evidence.

▫ It should be consistent with other available advancegiven by management.

▫ It should either be recorded in the minutes of theboard meeting or formally approved by the board ofdirectors.

▫ Directors should acknowledge in the letter theirresponsibilities for the preparation of financialstatement.


4. Sending Letter to Management

▫ It pointing out the areas whereinefficiencies were observed and thesuggested constructive advice forimprovement in financial control.

▫ It also deals with appreciation for co-operation and assistance extended by theclient’s staff and management during thecourse of audit.


5. Points Carried to Subsequent Audit

▫All the unsettled points have to betaken up at the next period andsettled with the client at the start ofnext audit.

▫Auditor have to be maintain adequaterecord of all such items.


6. Summary Records of Error▫ Audit staff should prepare a summary of

all such errors and omission which havebeen observed during the course of auditand which have remain unadjusted.

▫ On the basis of this summary, theauditor should decided whether thenature of any error justifies itsopportunity to the management.

Education

12. audit completion