[Anonymous]

Per ENPL-0053 of WTB, with respect to a year-end audit, it is an acceptable practice for the auditor to carry out substantial parts of the examinaion at interim dates.

Can someone explain the above statement in ordinary layman’s terms please?

Thanks.

[Zaq]

Yes.

#1: Let's say you're the auditor. You audit a company. The company has extremely well put controls in place that are both effective in design and operation. Awesome. That means there will be very little risk when auditing this company. Because of this, you can do interim testing which means you come in usually at a quarterly basis and do small amounts of testing to ensure that no material modifications need to be made for the company to be in accordance with GAAP.

When it comes down to year-end, as long as nothing crazy happened during the year you only really need to apply small alternative procedures instead of doing a full-blown audit on whatever items you tested during the interim review.

#2: Same thing, except the company's internal controls are in shambles. Almost non-existent. Very little reliance can be placed and there appears to be a high risk. Do NOT do interim testing. Instead, start the audit much closer toward the year-end. This provides a much more complete and thorough audit.

Hopefully, this makes sense.

FAR: 50, 76!
REG: 74... (ouch baby, very ouch), 76!
AUD: 65, 91!?
BEC: 80! Aaaand doneskies!

May 2012 to August 2013. Can't believe it's over.

[Anonymous]

@InfernoOmni, thanks a lot.

[Author]

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