2008年审计英语讲义 The Audit Evidence and Working Papers

Audit Evidence[审计证据]
　　Audit evidence is necessary to support the audit opinion; the auditors therefore need to obtain sufficient, relevant and reliable evidence to satisfy themselves that the objectives of the individual audit tests have been met. Once satisfied, they can arrival at the overall audit opinion in the knowledge that it can be adequately defended, if required, as all the evidence exists to prove how the opinion was arrived at.
　　Notes:
　　[教材:p118]
　　Sufficient:充分性
　　Relevant:适当性
　　Reliable:可靠性
 

　　Audit test:审计测试
　　Meet the objective of the individual audit test
　　Overall audit opinion
　　The auditors also need to consider when planning the audit what type（s） of audit evidence will be necessary in order to ensure that this is obtained on a timely basis. Certain types of evidence （e.g. receivables circularization） needs the involvement and co-operation of others （i.e. the client and their customer）. In such cases where the evidence-gathering process is lengthier, it is vital that sufficient planning is carried out.
 

　　Note:
　　Plan the audit:计划审计
　　Audit planning:审计计划
　　Audit evidence:审计证据
　　Type of audit evidence:审计证据的类型
　　On a timely basis:在及时的基础上（时效性）
　　Receivables circularization:向债务人函证应收账款（应收账款询证函）
　　Evidence-gathering：收集审计证据
　　In relation to substantive testing, we shall consider the assertions made in the financial statements by the directors. These assertions underlie all items in the financial statements, and so the auditor needs to obtain audit evidence that substantiates there assertions.
　　注意：现在实质性测试都叫做实质性程序
 

　　Note:
　　Substantive testing:实质性测试
　　Underlie:在……之下;成为……基础;
　　Substantiate:证实
 

　　Auditors also obtain evidence from test of control.
　　Test of control:控制测试
　　ISA500 Audit evidence requires that auditors obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the audit opinion.
 

　　Notes:
　　Appropriate: relevant + reliable
　　Sufficient relates to the quantity of evidence, appropriate relates to the quality or reliability and relevance of evidence.
　　Notes:
　　Quantity:数量
　　Quality:质量
　　Relate to:和……相关
　　Evidence will normally be sought from a variety of different sources because evidence is persuasive rather than conclusive, which is why auditors seek reasonable, not absolute assurance.
 

　　Notes:
　　Seek:寻找;（过去式/过去分词）sought
　　Persuasive: 有说服力的，易使人信服的：
　　e.g. a persuasive argument 令人信服的论据
　　Conclusive: 决定的， 结论性的， 决定性的； 最后的； 确凿的
　　e.g. conclusive evidence [proof]
　　确证， 真凭实据， 结论性的证据
　　e.g. conclusive presumption
　　【律】（不容反驳的）决定性推断
　　The auditor’s judgment as to what constitutes sufficient appropriate evidence is influenced by such factors as the following:
　　The assessment of risk at the financial statement level and the individual balance or class of transaction level
 

　　 The nature of the accounting and internal control systems
　　 The materiality of the item
 

　　 The auditor’s knowledge and experience of the business
　　 The findings of audit procedures
　　 The source and reliability of the information
　　The assessment of risk affects the amount of evidence required
　　Note:
　　Constitute: 构成,组成; Constitution:宪法
　　Assessment of risk:
　　Financial statement level:
　　Individual balance or class of transaction level:
　　Materiality:
　　Findings:发现, 发现物, 决定, [律]裁决
　　Risk may be in a specific area, it also may be a risk running through the financial statements as a whole.
　　Specific area:特定的领域
　　Run through:
　　As a whole:作为整体；从总体说
　　Working papers[工作底稿]
　　ISA315 requires that auditors obtain and document an understanding of the accounting system and control environment sufficient to determine their audit approach. The audit approach will broadly comprise either:
　　 System-based approach （test of control supplemented by reduced substantive testing）
　　 A wholly substantive approach
　　（The auditor should make a preliminary assessment of control risk and then plan and perform tests of control to support that assessment.）
　　Notes:
　　Document: vt.
　　Approach:方法论
　　System-based approach: 制度基础审计方法
　　Supplement:补充
　　To form an opinion on the financial statements, the auditors need to obtain evidence supporting the financial statement assertions.
　　The evidence should be relevant

Assertions about transactions and events for the period	Occurrence	A transaction or event pertaining to the entity occurred during the relevant accounting period （i.e. the transactions are not overstated）
	Completeness	There are no unrecorded transactions or events （i.e. the transactions are not understated）
	Accuracy	Transactions and events have been measured and recorded accurately
	Cut-off	Transactions and events have been recorded in the correct accounting period
	Classification	Transactions and events have been recorded in the correct accounts

　　

Assertions about account balances at the period end	Existence	Assets and liabilities exist
	Rights and obligations	An asset or liability pertains （i.e. belongs） to the entity （i.e. the entity has legal or other rights or obligations relating to the asset or liability） 　　The auditor must ensure that it is the business which owns the asset at the balance sheet date. There are many situations where an asset could be on the business premises but belong to someone else. （for example, inventory; in a small business, some of the assets may belong to the major shareholder）
	Completeness	There are no unrecorded assets or liabilities
	Valuation and allocation	Assets and liabilities have been measured at appropriate amounts, and any resulting valuation or allocation adjustments have been appropriately recorded

Assertions about presentation and disclosure	Occurrence and rights and obligations	All disclosed events, transactions and other matters have occurred and pertain to the entity
	Completeness	There are no unrecorded disclosures
	Classification and understandability	Financial information has been appropriately presented, and disclosures are clearly expressed
	Accuracy and valuation	All information has been disclosed fairly and at appropriate amounts

　　N.B.
　　Completeness and occurrence/existence
　　Two of the most important assertion tests are for completeness and occurrence/existence. There are tests going in the ‘opposite direction’ to each other.
　　企业都有虚增资产和低报负债的倾向，因此审计的顺序也是要有针对性的调整。
　　资产（收入）从财务报表到实物;
　　负债（费用）从实物到财务报表。
　　Substantive tests may be incorporated with other procedures such tests of control.
　　Notes:
　　Incorporate:
　　Pertain to: 属于, 关于, 附属, 适合, 相称
　　Types of substantive procedures[参见教材p121]
　　ISA500 sets out the types of substantive procedures that an auditor will carry out.
　　 Inspection of records and documents
　　 Inspection of tangible assets
　　 Observation （looking at processes and procedures being performed）
　　 Inquiry （seeking information from knowledgeable persons）
　　 Confirmation （a specific type of enquiry, the process of obtaining a representation from a third party）
　　 Recalculation （checking the mathematical accuracy of documents or records）
　　 Re performance （the auditor’s independence execution of procedures previously performed by entity staff）
　　 Analytical procedures
　　Notes:
　　中文翻译直接参阅教材p121
　　The evidence should be reliable.[参见教材p119]
　　Sources and relative merits of the different types of evidence available
　　Although the reliability of audit evidence is dependent upon the particular circumstances, the following general presumptions may be found helpful.
　　 Evidence obtained from independent external sources is more reliable than that obtained from the entity’s records
　　 Evidence obtained from the entity’s records is more reliable where the accounting and internal control system operate effectively
　　 Evidence obtained directly by auditors by such means as analysis and physical inspection is more reliable than evidence obtained by or from the entity
　　 Documentary evidence is more reliable than oral evidence
　　 Original documents are more reliable than copies, telexed or faxes
　　Documentary evidence
　　　　　　　　　　　　　Created by　　　　held by
　　Least reliable　　　　entity　　　　　　entity
　　More reliable　　　　third party　　　　entity
　　Most reliable　　　　third party　　　　auditor
　　Conclusions drawn from differing types of evidence should be consistent with one another
 

　　 Synergy（协同作用）
　　 Reliability in doubt when inconsistent
　　No hard and fast rules measured for the reliability of evidence; need the judgment of auditors
　　When obtaining confirmation from third parities as a source of evidence the auditor should consider:
　　 When such evidence is appropriate
　　 Which assertions are satisfied
　　 How can such evidence be obtained and what use（s） can be made of it
　　Notes:
　　Merit:优点;价值
　　Depend upon:取决于
　　Presumption:假定
　　Oral:口头的
　　Original:原始的
　　In doubt:
　　Synergy: （1）协同作用：两种或多种动力或力量的相互作用，以便其联合效果大于各单独作用之和;（2）增效作用：组织，尤指得到附属机构或某公司已合并的部门之间的合作性相互作用，创造出更大的联合效果
　　Typical situations where such evidence is invaluable is with receivable confirmations, bank confirmations （and, in some cases） payable confirmations.
　　Where third party evidence relates to specific balances e.g. bank, receivables, payables then it provides persuasive evidence as to rights and obligations and where relevant ownership of assets.
　　Analytical procedures as substantive tests
　　Analytical procedures deal with comparisons of financial and non-financial information and were considered in the stage of planning.
 

　　Analytical procedures used as substantive tests can be used alone where the total amounts involved are immaterial and in conjunction with detailed tests of transactions and balances elsewhere. These procedures provide good ‘overall’ evidence as to the accuracy of a balance or class of transactions.
　　Examples include the following:
　　 A comparison of payroll costs on a monthly basis taking account of wage rises, starters and leavers and seasonal work;
　　 A comparison of sales with expenses, on a monthly basis and as a comparison with prior years
　　 A comparison of the ageing of inventory or receivables on a monthly or quarterly basis and calculation of receivable days or inventory turnover
　　Analytical procedures are used widely but are limited by factors such as the accuracy and predictability of relationships and the availability, relevance and comparability of information. They are also limited by the auditor’s knowledge of the business and the availability of other types of evidence.
　　A key feature of analytical procedure is the investigation, explanation and corroboration of significant fluctuations and unexpected relationships. This emphasizes the need for predictable patterns in the business.
 

　　Notes:
　　Analytical procedure:分析程序
　　Comparison:
　　Contrast:
　　In conjunction with:
　　Payroll:
　　Take account of:
　　Prior:
　　Turnover: 流通量, 营业额, 周转
　　Aging: 老龄化,分期（指将应收账款依到期日先后进行分类）
　　Quarterly:
　　Corroboration: 使确实, 确证的事实, 确证
　　工作底稿
　　ISA230 Audit documentation states that the audit documentation （often called working papers） are the record of audit procedures performed, relevant audit evidence obtained, and conclusions that auditor reached.
　　Auditors are required to record on a timely basis for the auditor’s report and evidence that the audit was performed in accordance with ISAs and other regulatory requirements.
　　Working papers record:
　　The planning, performance, supervision and review of the audit work
　　The audit evidence resulting from this work, on which the auditors have relied to support their report
 

　　Reasons for preparing working papers
　　 The reporting partner rarely performs the audit work – he/she needs a fully documented file to enable him/her to arrive at an opinion
　　 Evidence that an effective audit has been carried out
　　 Working papers increase the efficiency and effectiveness of the audit
　　Objectives of working papers
　　 Should be sufficiently detailed and complete to enable an auditor not familiar with the assignment to establish the work completed and the reasons for conclusion drawn
 

　　 Should be up to date
 

　　 Should indicate the basis for the auditor’s conclusions
　　Contents of working papers
　　 Information of continuing importance （e.g. Articles of Association）
　　 Planning information （e.g. time budget）
　　 Details of accounting systems and internal controls
　　 Details of work carried out
　　 Evidence of review of audit work
　　 Supporting schedules to financial statements
　　 Audit summary
　　Benefits of standardization of working papers
 

　　 Increases efficiency
　　 Assists in delegation
　　 Helps to maintain quality control
　　 Useful for routine documentation, such as checklists
　　Guidelines for preparing working papers
　　 Use ink, not pencil
　　 Give descriptions of audit symbols used
　　 Be neat and tidy
　　 Include standard heading （e.g. client’s name, year end etc）
　　 Each page of the working papers should be initialed and dated by the staff member writing the notes after performing the tests
　　 The manager should also initial and date the page when reviewing the working papers
　　Permanent audit file
　　 Statutory information （shareholders, directors, memorandum and articles of association, etc）
　　 Information about the enterprise （activities and locations, organization charts, systems, client contacts, bank and solicitors etc）
　　 Engagement letter（审计业务约定书）
　　 Important agreements
　　 Copies of signed accounts
　　Current audit file
　　 Index
　　 Control schedules （including notes for partner, matters brought forward and carried forward, budget and time records）
　　 Financial statements
　　 Detailed audit work, arranged by area （non-current assets, inventories etc）
　　Auditors should adopt procedures for maintaining the confidentiality and safe custody of their working papers. Working papers are the property of the auditors. They should not generally be made available to third parties without the permission of the client.
 

　　Notes
　　Supervision:
　　Rely on:
　　Initial:
　　Article of Association:
　　Engagement Letter:
　　Bring forward/carry forward
 

　　Property: