Auditing Accounting Estimates (CAS 540)
Overview
CAS 540 Auditing Accounting Estimates and Related Disclosures outlines the requirements in auditing management’s estimates and related disclosures. Many times, auditors face challenges in how to apply the standards. This course will help auditors appreciate the CAS requirements and how to meet them.
Using a practical five-step approach, this course will help auditors identify and assess the risk of material misstatement related to accounting estimates, design and perform risk responses and conclude and report. Furthermore, auditors will leave with a solid approach to documentation.
Through real-world scenarios and illustrative examples, auditors will have a better understanding of the requirements and be able to audit accounting estimates and related disclosures in an effective and efficient manner.
Learning Objectives
By the end of the session participants will be able to:
- Understand CAS requirements for auditing accounting estimates and related disclosures
- Appreciate key concepts including inherent risk factors and how they impact estimates
- Follow an efficient 5-step approach to auditing estimates
- Explain risk assessment procedures
- Understand alternatives in obtaining sufficient appropriate evidence
- Implement best practices for evaluating audit evidence
- Document and conclude on results effectively and efficiently
Course Content
Module 01
CAS 540 overview and review of key audit concepts
Module 02
Identify RMM including understanding the entity, AFRF and system of internal control
Module 03
Conclude on inherent and control risks at the assertion level and identify significant risks
Module 04
Determine the approach: subsequent events, testing management’s estimate or determine the auditor’s estimate
Module 05
Assess the audit evidence, communicate and document
Module 06
Review of key concepts and action planning
Module 07
CAS 540 Course Resources: Course slides and links to other relevant resources