Course Overview

One of the IRBA’s most common findings involves a lack of sufficient audit evidence related to material misstatements, as well as the improper evaluation of aggregated unadjusted misstatements. Ensuring that identified misstatements are properly assessed, documented, and addressed is essential to delivering high-quality audits and maintaining compliance with auditing standards.

This course provides practical guidance on how to manage misstatements during an audit, including techniques for extrapolating misstatements from samples, calculating materiality, and assessing whether unadjusted misstatements require further action. Participants will also learn when and how to report misstatements to those charged with governance and how to revise their audit plan or strategy if needed.

Course Objective

This course includes theory, practical exercises, and real-world case studies, giving participants the opportunity to apply concepts directly to their audit engagements.

This course will ensure participants are well-prepared to identify, evaluate, and document
misstatements effectively, maintain compliance with standards, and meet IRBA’s expectations for high-quality audits

Course Content

Introduction to Misstatements and IRBA Findings

• Overview of common IRBA findings related to misstatements and insufficient audit evidence
• Key issues in identifying and documenting material misstatements

Identifying and Addressing Misstatements

• What to do when misstatements are identified
• Techniques for extrapolating misstatements from sample selections
• Schedule of overs and unders: Managing individual and aggregated misstatements

Performance Materiality and Final Materiality Calculations

• When and how to apply performance materiality
• Calculating final materiality to assess the impact of misstatements
• Determining if prior-year unadjusted misstatements should be carried over to the current year

Evaluation of Aggregated Unadjusted Misstatements

• Evaluating misstatements on an individual, aggregate, and category basis
• Assessing the impact of unadjusted misstatements on the financial statements

Impact on the Audit Plan and Strategy

• When and how to reassess your audit plan and strategy based on identified misstatements
• Deciding whether additional procedures are needed

Communicating with Those Charged with Governance

• When to report misstatements and other relevant findings to governance bodies
• Best practices for presenting unadjusted misstatements and recommended actions

Who Should Attend

• Auditors
• Audit Managers
• Audit Partners
• Engagement Quality Control Reviewers
• Senior Audit Trainees