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Audit

The audit area has information and guidance on completing all stages of an audit as well as making the decision around whether or not an audit is required. There are links to technical help, webinars, publications and events as well as audit representations.

In this section

Audit exemption

Audit exemption eligibility

Learn whether your organisation qualified for audit exemption for reporting periods beginning on or after 1 January 2016, under the Companies Act 2006 as amended by SI 2015/980. ICAEW's Technical Advisory Service provides guidance covering: group eligibility; eligibility of UK subsidiaries; and audit exemption conditions.

Appointment and engagement terms

The importance of achieving audit objectives

ISA 200 highlights the importance of objectives in auditing standards. Understanding ISA 200 is fundamental to understanding the challenge of implementing ISAs. This guide seeks to help auditors understand the overall objectives of the auditor and how they relate to the individual objectives and requirements in ISAs, and the role of professional judgement and scepticism.

Auditor independence

Auditor independence refers to the independence of the external auditor. It is characterised by integrity and an objective approach to the audit process. The concept requires the auditor to carry out his or her work freely and in an objective manner.

Planning, risk assessment and internal control

Internal control in smaller ISA audits

Understanding and documenting internal control has always been a challenging area in smaller entity audits. This guide helps auditors to understand the requirements in this area and addresses common questions from auditors such as how to evaluate the control environment and deal with the entity’s information system.

Risk assessment and internal controls: continuing challenges for auditors

Risk assessment is critical to the conduct of all financial statement audits. The idea of a ‘risk-based’ approach to auditing has been around for at least 20 years, and it is not a difficult concept: it refers to the focus of the audit process on those areas that are most at risk of material misstatement. But both auditors and regulators report problems in in applying the relevant auditing standards consistently.

Supporting audit quality

Improving audit quality using root cause analysis

With external audits under unprecedented levels of scrutiny, root cause analysis (RCA) can be a useful tool for those tasked with improving audit quality. The Audit and Assurance Faculty has published this practical paper for its members outlining what RCA is and what auditors need to consider to make the most of this useful tool.

The audit of related parties in practice

In the light of increasing public interest in the quality of audits, the faculty considers that the audit of related parties is an area where further improvements in audit quality and efficiency can be achieved.

Determining and applying materiality

Material is material, but what does material mean?

In this webinar David Gallagher will address how to apply these principles effectively and how to record them efficiently. He will briefly summarise the key requirements of the ISAs but the main focus will be on effective application and will include practical guidance and examples.

Applying professional scepticism and judgement

Scepticism: the practitioners' take

Professional scepticism is central to the work of auditors and yet audit regulators and others continue to express concerns that auditors are not sufficiently sceptical. This report explores what auditors and other stakeholders think about how it can be enhanced and who is responsible for it.

Auditing accounting estimates

Accounting estimates in an ISA audit

Accounting estimates are increasingly common in financial statements and, by their very nature, can be challenging for auditors to audit. This guide looks at the requirements in ISA 540 Auditing accounting estimates, including fair value accounting estimates, and related disclosures and answer questions from auditors about practical challenges.

What is an accounting estimate?

When performing audits of financial statements, it is important that you identify all relevant accounting estimates to which the requirements in ISA 540 apply. You can find out more below on how to spot accounting estimates and not overlook the more obvious ones in your audit.

Risk factors in auditing accounting estimates

The risk that an accounting estimate might be materially misstated is influenced by a number of factors. You can find out more below on risk factors and how they may influence your audit of accounting estimates.

Determining high estimation uncertainty and significant risk

When performing an audit, you need to use your judgement to determine whether an accounting estimate, identified as having high estimation uncertainty, gives rise to a significant risk. The examples and guidance below are designed to help you when considering whether estimates with high estimation uncertainty may give rise to significant risks.

Documenting the audit of accounting estimates

Documenting the audit of accounting estimates is important because it provides evidence that the audit complies with ISAs. You can find out more below on what needs to be documented, and when, in your audit of accounting estimates.

Reporting and completion

Reporting in an ISA audit

IAASB issued a suite of revised and new auditor reporting standards (ISAs) addressing the audits of complete sets of general purpose financial statements in 2015. The changes mainly focus on increasing transparency about the audit performed. This guide outlines the key requirements for auditors.

Audit and assurance guides and helpsheets

Audit and Assurance Faculty Guides and Technical Advisory Services helpsheets prepared by ICAEW technical specialists to assist you in your day-to-day work. We offer practical advice, respond to frequently asked questions and highlight the issues you may need to consider. Audit and Assurance Faculty Guides were formerly known as 'Helpsheets'.

Groups audits

Group audits and recent guidance

All group audits will be affected by recent Financial Reporting Council guidance on review of component auditors’ work. Geoff Swales of PwC explains the requirements of ISA (UK) 600 and outlines the work of the group engagement team.

Auditing groups - subsidiaries

Technical helpsheet issued by to help ICAEW members to understand their responsibilities regarding subsidiaries when auditing the group accounts and the implications on the auditor’s report where access to the financial information of subsidiaries is denied by the parent entity.