Page 63 - Microsoft Word - 00 IWB ACCA F7.docx

Planning

For an interim audit to be justified the client normally needs to be of a sufficient size.

An interim audit should improve risk assessment and make final procedures more
efficient.

If there is to be an interim as well as a final audit, the timing has to be:

Early enough:

 not to interfere with year-end procedures at the client

 to give adequate warning of specific problems that need to be addressed in
planning the final audit.

Late enough:

 to enable sufficient work to be done to ease the pressure on the final audit.

Final audit

Take place after the year-end and focus on the remaining tests and areas that pose
significant risk of material misstatement.

This usually involves concentration on:

 statement of financial position balances which will only be known at the year-
end

 transaction testing for transactions that have occurred since the interim audit
took place

 year-end journals which may include adjustments to the transactions tested at
the interim audit

 obtaining evidence that the controls tested at the interim audit have continued to
operate during the period since the interim audit took place.

59