This 2-hour session focuses on the initial information that is gathered and important conclusions that are reached at the onset of engagement planning and the performance of certain risk assessment procedures. Auditing Bits in Bytes™ – A Practical Break-Down of “Real World” Best Practices Applied in Highly Successful Audits is a series of eight individual sessions that guide professionals through the complete audit process from “A to Z” – starting with Pre-Engagement Planning Activities, and going all the way through Wrap-up and Quality Control.Attempting to perform an effective and efficient audit can be intimidating and confusing, for new and experienced auditors alike. This series will provide valuable tips and techniques from an experienced auditor that are needed to successfully design and perform financial statement audits in “real-life” circumstances. Extensive illustrative examples will be used to reinforce a practical understanding of the most critical principles and standards that support a high-quality, insightful, and profitable engagement. This 2-hour session focuses on the initial information that is gathered and important conclusions that are reached at the on-set of engagement planning and the performance of certain risk assessment procedures. This phase of the engagement sets the stage for how much effort will be invested in evaluating the design and implementation of internal controls (which is covered in Session 3 of this series). Key professional judgments made at this stage provide the foundation and rationale for risk assessment conclusions that are ultimately used to design the nature, timing and extent of further audit procedures (which is covered in Session 4 of this series). One of the most important learning points that participants will take away from this session will be the recognition that these preliminary activities are not just “check off the box” tasks, but are critical to early judgment calls about risk of material misstatement, which directly influences the audit effectiveness and efficiency. Who Will Benefit Anyone who is new to auditing or desires a refresher on how to perform effective and efficient financial statement audits for non-issuers in accordance with professional and regulatory standards Key Topics - Gaining an Understanding of the Entity & Environment – What should be documented and how it relates to identifying areas of higher risk of material misstatement - Materiality & Performance Materiality – How these are not just rote calculations on a standard form, but important and key decisions that set the stage for conclusions throughout the entire audit - Preliminary Analytic Procedures – Why this analysis assists the auditor in identifying significant audit areas and “what could go wrong” in the client’s financial statements due to fraud or error - Fraud Risk Considerations – Common peer review deficiencies identified related to these important required procedures - Identifying Significant Audit Areas – How to identify significant accounts, classes or transactions and disclosures, and what that means to further risk assessment procedures - Extensive illustrative examples will be used to reinforce a practical understanding of the most critical principles and standards that support a high-quality, insightful, and profitable engagement Learning Objectives - Recognize how preliminary planning and risk assessment activities are not just “check off the box” tasks, but meaningful judgments that directly influence audit effectiveness - Describe the initial information that should be gathered about the entity and its environment to have a proper basis for important decisions made in early planning and risk assessment - Recognize the importance of key materiality and performance materiality judgments, and resulting impact on risk assessment and the detailed audit plan - Describe how proper preliminary analytic review sets the stage for how much audit effort will be spent on the engagement - Identify ways to avoid common deficiencies in identifying and responding to fraud risk on the audit - Describe the factors that should be considered when designating significant audit areas