bea2004 slides unit 8 completing the audit

Completing the AuditIssues as to• Evidence aggregation and evaluation• Consideration of going concern• Management representations• Provisions and contingent liabilities• Subsequent events• Final discussions with management• Management letterEvidence aggregation and evaluationAudit procedures will normally be undertaken and working papers prepared by more junior staff and this work will be reviewed at manager and partner levelthese reviews will consider the nature and suitability of the audit evidence collected and the impact of known or estimated mis-statements on the truth and fairness of the financial statements1Evidence aggregation and evaluationHere decisions as to whether actual or potential errors do, or do not, impact the truth and fairness of the financial statements will be influenced by inter alia• the nature and size of the error• the nature of the account item• the strength of the evidence• the management response Evidence aggregation and evaluationThese decisions will be made within an overall context of materiality and audit riskHere factors such as perceived earnings management by the client may be relevant, for example where there are a number of errors/contentious forms of accounting all running in the same direction as in Pergammon(see slides for unit 5) or more recently Enron (see forthcoming handout)2Going concernFinancial statements are normally prepared on a going concern basis, i.e. the assumption that ...