Chapter 7: Completion and Review

Chapter 7: Completion and Review

 

Question: Explain the importance of the completion and review process in an audit.

Answer:

The Completion and Review process is a critical phase in an audit where the auditor ensures that all audit procedures have been properly performed, and that the audit evidence supports the auditor’s opinion on the financial statements. This process involves finalizing the audit file, reviewing the documentation, and preparing for the audit report.

Importance of the Completion and Review Process

1.       Ensures All Audit Procedures are Completed

o   During the completion phase, the auditor ensures that all planned audit procedures have been carried out. This includes verifying that the testing of controls, substantive procedures, and final review steps have been performed. It ensures that no important area is overlooked and that the audit is comprehensive.

2.       Helps in Forming the Audit Opinion

o   The review process involves examining the audit evidence and ensuring it is sufficient to support the audit opinion. Auditors assess whether the evidence gathered provides a reasonable basis for expressing an opinion on the financial statements. If the evidence is inadequate or conflicting, the auditor may need to perform additional procedures.

3.       Confirms Compliance with Legal and Ethical Standards

o   The completion and review process ensures that the audit complies with auditing standards (e.g., SA 700). It also confirms compliance with ethical requirements, such as independence, objectivity, and confidentiality. This is essential in maintaining the credibility of the audit process and the auditor's reputation.

4.       Identifies and Resolves Outstanding Issues

o   Any unresolved issues or areas of concern identified during the audit are addressed during the review stage. The auditor ensures that these issues are adequately documented and resolved, ensuring that the financial statements reflect a true and fair view. If discrepancies or errors are found, they are corrected before the final opinion is issued.

5.       Preparation for Final Audit Report

o   Once the audit is completed and reviewed, the auditor prepares the final audit report, which includes the auditor’s opinion on the financial statements. The review process ensures that the report is based on sound audit evidence and that all conclusions are appropriately supported. It also ensures that the report meets regulatory and professional standards.

 


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