Consider the nature of the entity being audited

Consider the purpose of preparing financial statements

Consider the nature (characteristics, characteristics) of the financial statements: a complete set or a single statement

Consider whether laws and regulations provide for the applicable basis for the preparation of financial statements

Prepare financial statements on a suitable basis (prepare according to rules)

Design, implement and maintain necessary internal controls

Provide necessary working conditions to the Association

Provide a written statement to the AICPA

Changes in management rights, changes in ownership, changes in the nature or scale of the audited unit, changes in regulations, and whether the preparation basis has changed

Reasons for business changes (the article is not on topic)

Without reasonable justification, the CPA should not agree to change the audit engagement to one with a lower level of assurance

Overall approach to further audits: testing of controls and substantive procedures

Specific audit procedures to be implemented

Determined based on professional judgment of the association

The audit work should be revised accordingly

Significant changes and reasons should be recorded in the audit working papers

Size and complexity of the audited entity

Audit field

Assessed risk of material misstatement

Professional qualities and competencies of project team members performing audit work

From a CPA perspective: Materiality is the largest misstatement that a CPA can tolerate for the overall financial statements.

A misstatement is material if, individually or in the aggregate, the misstatements could reasonably be expected to affect the economic decisions of users of financial statements.

Judgments on materiality are made based on the specific environment (and the auditee and the environment) and are affected by the amount, nature, or both of the misstatements.

Since different financial statement users may have very different needs for financial information, the possible impact of misstatements on individual financial statement users is not considered.

If there is no significant change in the business scale of the audited entity compared with the previous year, the importance determined using an alternative basis should not exceed the importance of the previous year.

The inherent uncertainties associated with the measurement of specific items need not be considered when determining materiality levels.

Are financial statements distributed to a broad range of users - broad range, low percentage

Whether the audited unit is provided with financing by related parties within the group or large-amount external financing - large-amount external financing, the percentage is low

Is the user particularly sensitive to benchmark data?

Importance level: the amount of importance

Whether laws, regulations or the basis for preparing financial statements used affect the expectations of users of financial statements regarding the measurement or disclosure of specific items

Key disclosures related to the industry in which the audited entity operates

Whether users of financial statements are particularly concerned about specific aspects disclosed separately in the financial statements

Concept: less material than the financial statements as a whole or less material than a specific transaction, account balance or disclosure); all businesses must determine actual execution material, at least one, can be multiple

Reasons for the importance of practical implementation: Expanding the safety boundary of auditing (making audit work safer, more prudent, and more in line with the principles of professional skepticism)

Determine the importance of execution

Significant changes occurred during the audit

Get new information

Changes in understanding of the auditee and its operations through the implementation of further audit procedures

Identification of transactions, account balances and disclosures requiring further audit procedures: impact of aggregation, impact of underestimation, impact of fraud

The materiality of actual performance is used to determine the nature, timing and scope of further audit procedures

Refers to the amount, classification or presentation of enterprise statement items, differences from the preparation basis, or necessary adjustments deemed necessary by the Notes Committee

(1) Historical situation: the number and amount of misstatements identified in previous annual audits; (2) Risk of material misstatement: assessment results of risk of material misstatement; (3) Client requirements: The governance and management expectations of the audited entity for the CPA to communicate misstatements with them; (4) Regulatory requirements: Whether the financial indicators of the audited unit meet the requirements of regulatory agencies or the expectations of investors.

Facts: There is no doubt

Judgment misstatement: The Note believes that management has made unreasonable and inappropriate judgments on the recognition, measurement and presentation of financial statements.

Inferred misstatements: misstatements of the population estimated from the test sample - specific misstatements identified

Obvious and minor misstatements do not need to be accumulated; the aggregate number of misstatements = identified specific misstatements Inferred misstatements = factual misstatements Judgment misstatements Inferred misstatements

Misstatements may not occur in isolation

Sampling risk and non-sampling risk may cause some misstatements to go undetected