Acca aaa s21 Notes

Particular regulations.
Banks, insurance companies, and many other operations in the financial 
sector are subject to regulation and sometimes the auditor has to ensure that these regulations 
have been adhered to.
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Applicable financial report framework.
An understanding of the applicable financial 
reporting framework is essential to evaluating whether the entity's accounting policies are 
appropriate. An entity may apply industry-specific practices or account for transactions in 
emerging areas (e.g. crytocurrency).
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Objectives and strategies.
The auditors must gain an understanding of the entity’s, objectives, 
and strategies. The entity’s management defines objectives, and strategies are devised to try 
and achieve those objectives.
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Nature of business risks.
Business risks can arise from circumstances which mean that the
company’s objectives and strategies may not be achieved. Business risk is broader than the risk 
of material misstatement of the financial statements. Most business risks will eventually have 
financial consequences and therefore an effect on the financial statements. It is important for 
the auditors, therefore, to understand what the risks are.
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System of internal control
. The auditor has to gain an understanding of the entity’s internal 
controls. Whether they exist and to what extent they are expected to operate.
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The control environment. 
The effectiveness of the control environment has a significant 
bearing on the auditor's confidence in the other components of the system of internal control 
which will affect the nature, timing and extent of audit procedures.
September 2021 to June 2022 exams
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