Wiley Advantage Audit:
User Instructions

This product is a planning document and an audit program, hereafter referred to as Advantage Audit Quality Control Materials (QCM).

These QCM are designed to assist professionals in performing audits, specifically with:
  • Planning an audit in accordance with professional standards,
  • Providing an audit program. Documentation in an audit program provides places to indicate who performed audit procedures, date performed, reference to workpaper index and conclusions.

Since this product is only a planning document and an audit program, other resources or professional standards should be consulted for:
  • Reporting examples or financial statement disclosures,
  • Guidance on accounting or industry-specific accounting matters,
  • Templates for confirmations, and communication with clients including engagement, representation, those charged with governance, and other matters (some of these items are separately available in our Confirmation Manual, which has not been peer reviewed)

Completed planning and audit program materials for a sample company (Sample Company materials) to help guide you through the audit are also separately available; they have not been peer reviewed.

These QCM are designed for “low-complexity” audits of non-public companies, which Advantage Audit defines as engagements that are generally smaller in size, with one operating location, less complex accounting and auditing issues, smaller internal accounting departments, with no consolidated and/or multinational operations; the audit approach generally includes more substantive auditing procedures and less reliance on controls. These materials are generally intended for use by smaller firms. However, firms of all sizes can use these materials, if adequate firm controls exist to limit use to the appropriate engagement.

The intended users of these QCM are professionals with substantial accounting, auditing, and specific industry experience and knowledge. These QCM include references to professional standards and all users are required to use appropriate professional standards reference material (whether referenced or not) as a supplement when they are using these QCM. If these QCM are used by professionals with less experience, supervisory professionals must meet all AICPA supervisory standards and adequately instruct, train and supervise the professional staff on the use of the quality control material and all work performed. These QCM are not intended as teaching or learning tools for the user. Professionals are reminded to tailor these QCM as appropriate and use professional judgment in its application based on facts and circumstances.

Users should consult with professional standards to ensure that its working papers, memoranda, and other documentation meet professional standards. Users should tailor audit assertions listed in the audit program to the specific engagements. Auditors need to consider both basic and further audit procedures in the execution of their audit.

Wiley Advantage Audit 2018 Updates:
These QCM are updated for all pronouncements, including Statements on Auditing Standards (SAS) through #132.

Wiley Advantage Audit 2019 Updates:
These QCM are updated for all pronouncements, including Statements on Auditing Standards (SAS) through #133. In that regard, since the issuance of the 2018 QCM, which included all pronouncements through SAS #132, only SAS #133, The Auditor’s Involvement With Exempt Offering Documents, was issued by the AICPA. Given the nature of this manual as being appropriate for low-complexity audits of non-public companies, the author and editors have concluded that SAS #133 is not relevant to this QCM. This QCM has been updated for any relevant changes to extant standards since the issuance of the 2018 QCM and includes references to standards as deemed appropriate.

Through the AICPA’s initiative on Enhancing Audit Quality (EAQ), data surfaced that indicates firms often fail to perform appropriate risk assessments and link those risk assessments to their audit procedures in compliance with AU-C Section 315 and AUC-C Section 330. As a result, the AICPA Peer Review Board has developed more stringent guidance and, therefore, this QCM has been expanded to include specific linkage between risk assessment and related audit procedures to address risks identified.

The following is a high-level summary of changes to the 2019 QCM from 2018 QCM:

Section Reference Significant Change
Risk-Based Audit Planning: Understanding the Entity and Its Environment Entity’s Selection and Application of Accounting Policies (AU-C 315.12c) (Ref .A35)
Risk-Based Audit Planning: Understanding the Entity and Its Environment Objectives and Strategies and Related Business Risks (AU-C 315.12d) (Ref .A36–.A42)
Other Planning Considerations Auditor's Specialists – added clarity regarding agreements between auditors and specialists utilized by the auditor.
Materiality Level Guidelines Performance materiality– clarified that tolerable misstatement should be detailed as applicable in performing sampling applications
Internal Control Renamed "Narrative Description of Accounting System" to "Narrative Detailed Description of Relevant Control Activities for Material Transaction Classes, Accounts, Balances or Disclosures" and clarified design/implementation evaluation and walkthrough documentation for material transaction cycles. (AU-C 315.14)
Overall Audit Strategy and Plan Reconfigured tables to clarify identified risks and audit response and added instruction to cross-reference such risks to the risk assessment table immediately following the identified risk table
Other – Related Party Transactions Added enhancement to the related party transaction audit program.
Concluding Activities Enhanced clarification regarding obtaining management approval for uncorrected misstatements in connection with the client management representation letter.
Audit Documentation Checklist (AU-C 230) An audit documentation checklist has been added to assist auditors in better evaluating the completeness of their working papers in accordance with professional standards.

These QCM are designed to include many possible audit areas, but cannot include all types of transactions and balances. Users should consult professional standards when they encounter areas not addressed in these materials.

Limit of Liability/Disclaimer of Warranty: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.
—From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations.

We welcome your feedback. Please e-mail us at advantageaudit@wiley.com with any suggestions.

Practice Aids

Advantage Audit Non-Core products include sample answers on risk-based planning documents and audit programs, as well as a confirmation manual (practice aids) and communications (practice aids) on review and compilation engagements. The Wiley GAAS guide, GAAP guide, IFRS guide, and disclosure checklist are also Non-Core products. Note that this guide does not include communications with predecessor auditors.

It is imperative that the user of Non-Core products understand that these products have not been peer reviewed and do not include all the requirements of Quality Control Materials established by the American Institute of Certified Public Accountants (AICPA). Additionally, our sample answers are limited to a specific company in each industry and do not include all possible types of companies, risks, or procedures. The users should use their own professional judgment and experience, research all matters included in these documents, and read the instructions in the Advantage Audit Core product. The Advantage Audit is not providing any form of assurance on this material.
These are a general guide for confirmations and other correspondence applicable to engagements. It is not intended to be all inclusive, and auditors should, where appropriate, tailor the correspondence to the requirements of the engagement. The following should also be taken into consideration:
  • This is a general guide, and auditors should refer to professional standards.
  • Auditors should decide the selection criteria for mailing of confirmations.
  • Auditors should always control the mailing of independent confirmations.