Determining the Extent of Audit Testing - Filmed in 2020

Course Price: $179.97

Number of PD hours: 3.0

Online - Recorded - Available

Ensuring that the audit is performed efficiently while still ensuring that the risks of material misstatement (RMM) have been reduced to an acceptable level is dependent on an accurate risk assessment at both the F/S and assertion levels and a risk response that is tailored to the risks and assertions.  This is the basis of a risk-based audit approached envisioned by the Canadian Auditing Standards.

Since the instruction of the CASs in 2010, Practice Inspection focused primarily on the risk assessment side of the audit strategy, since this represented a significant change from existing practice.  The pendulum has now swung towards risk response, specifically examining the linkage between the assessed level of risk and the extent of the audit procedures performed.   CAS 530 Sampling has over 10 “shalls”, which are rarely considered and documented.  

Data analytics is gaining in popularity, but most auditors struggle with how to use these in the audit to gain any audit evidence or reduce the amount of substantive testing.

In our experience as monitors and working through many practice inspections every year, we commonly see the following deficiencies:

  • Tests of control are poorly designed – they are often not control tests or test all assertions for which assurance is desired;
  • Substantive tests are often confused poorly designed and virtually all of the files we examine have little support for the sample sizes chosen in a test of details.   To make matters worse, many firm policies or practices also clearly violate these principles.   (i.e. one sample per month)
  • Substantive analytical procedures are in fact only basic analytical procedures that don’t achieve the desired audit evidence.

In order to plan and perform an efficient audit, ensuring the extent of testing matches the risks is critical.

This course will examine:

  • A brief review of


Marcus Guenther MBA, CPA, CA

Marcus Guenther works with corporations and accounting firms to improve their workflow, internal control and risk management practices, as well as assisting with technical accounting and auditing issues. He is the co-author of the CICA Professional Engagement Manual (CPEM) as well as other technical publications and articles and teaches accounting, IFRS, and auditing and assurance courses for numerous professional organizations.

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