what's up audit fans have you ever opened the auditing standards or opened the pdf and just become completely overwhelmed and bamboozled well today's video is for you today we're going to look at how you can unlock the secrets to learn auditing standards easily let's get into it back to my regular subscribers hello to all those people who are always commenting on my new videos and sharing their knowledge with our little audit community here i really value your contribution so welcome back to anybody who's new hi my name is amanda i do love to audit and i've been teaching auditing at a major australian university for over a decade now it doesn't seem like that long and i've been in higher education for almost two decades and i really love sharing what i know about audit and how to unlock insights to help students so today we're looking at the audit standards and they're really really important because they're the foundation of auditing in my particular course i don't actually prescribe a textbook i prescribe the auditing standards and we use those as our foundation now no matter where you are whether you're here in australia where i am and you have the australian auditing standards whether you're using the international versions issued by the international assurance and audit standards board so you're looking at the um isas or even if you're in the us and you're using the uss their standards on auditing this process is going to be useful no matter what jurisdiction and what standards you have because the standards while not all totally aligned across the entire globe have a fairly similar structure and layout so today i'm going to share with you four top tips that i have to help unlock the secrets of understanding what is going on in these standards and how we can take advantage of that for our learning to make the whole process easier so tip number one is going to be about unlocking the structure of the audit standards no matter where in the world you're studying audit the standards are usually structured the same whether you're here in australia whether you're using the international auditing standards the isas whether you're using the us standards the sas they have a similar layout and once you can get into the groove and unlock the secrets of that layout it makes it really easy to actually find what you need and read the information without getting overwhelmed by all these unfamiliar words so we always start out with the objective now certainly at the front of the standard there's a whole lot of legal information about scope and date of application etc but for a student who's learning the standard obviously you need to make sure you have the most current standard so always look at the list and make sure it's the most current one but you always start with the objective the objective is what is the purpose of this standard why do we have it what is it trying to help us understand the second part is going to be the definitions if you're new to audit or you're just learning about this process or you need a refresher then the definitions are really critical because they'll tell you exactly what an engagement letter is or what inherent risk is or what the population of something is so the definitions are really critical and the thing is they're spread all throughout the individual standards there's not one central glossary for the audit standard so you're going to need to find it in the definition section of each standard now the third part of the audit standards that i always like to look at is the requirements remember the requirements are the bits that you have to follow these are the explicit rules set out for auditors the auditors shall gather sufficient and appropriate evidence to be able to render their audit opinion the auditor shall provide an opinion on um you know the financial statements and whether they're free from material misstatement the auditor should set a level of materiality so the requirements tell us step by step what we should be doing and they usually are in that process of at the start of the audit in the middle of the audit at the end of the audit so the requirements are really clear but a key issue when i'm talking with students and people online is that they look at the requirements and go i don't understand this language what does some of this mean because they are the requirements they're not written with a lot of extra explanatory material they're just exactly what the auditor should do according to the standard so my second tip and one that uh students often don't do people studying auditing don't do is look at the explanatory and application material that's after the requirements and people will often go well there's three pages of requirements but 20 pages of explanatory material i don't want to read more and often people will just stick with the requirements and be confused but here's where the application and explanatory material is really important the application and explanatory material actually provides context to the main standard so a standard might have a sentence and you go i don't understand what that sentence means then you can go to the explanatory material often there will be a cross reference so it'll say look at paragraph a 25 or a3 and those a paragraphs indicate application and explanatory paragraph material that's where they say in a situation here's an example here is how we apply that in some more depth so if you're stuck after reading the requirements definitely definitely look at the explanatory material because it provides a lot of insights you might need to have potentially both you know bookmark or something on the pdf so that you can flip from the requirements to the explanatory material and almost read them side by side my third tip is to take advantage of existing resources now of course i have an entire set where i've gone through almost every single auditing standard in the australian versions anyway line by line to explain exactly what is happening and what the words mean so i've gone through the objective the definition and the requirement i don't go through the explanatory material because it's just too long it wouldn't actually fit in a video but leverage off the resources that i've already built and that are available to you absolutely free you could also look for materials from any of the public accounting firms the major professional associations so in the us for example the aicpa has a lot of great stuff on various auditing standards um in australia the auditing standards board the big four audit firms and other professional accounting firms will often put out their own explainer videos about what an auditing standard means especially in a specific jurisdiction so do some youtube searching there and start creating some playlists of perhaps my videos some from a professional body and also from um the major accounting firms just to gather that resource i'll often often a lot of my students find it easier to actually watch me explaining the standards than reading the standards themselves so a video is a good way to start if you're that type of visual learner but of course remember do what works for you if you can read the standards and you're understanding it you're seeing the picture of what the standards are trying to put together then that is absolutely fantastic if you're more of a visual learner and you prefer watching somebody else explain then definitely check out videos and other resources my fourth and final tip on how to learn the auditing standards easily is retrieval practice and what does that mean well in education we know that students take information in as you're learning something you know you're reading about stuff you're watching videos you're taking notes okay it's important to take notes it's important to get that information and put it into your own words so don't copy my words take what you're understanding and write it down in your own words because then it'll be easier for you to replicate and reference in the exam that's really important so retrieval practice means not just absorbing information but practicing pulling that information out of your brain because that's exactly what you have to do in an exam an exam is not about putting information in a really key stumbling block i guess i see with students who are not doing so well at university is that they're often focused on putting information in so reading reading reading but perhaps not doing practice so it could be that you could work with some friends to create some quizzes for yourself so create some um questions where you could test each other so writing notes can be really useful and a great form of retrieval not necessarily just like copying what i'm saying or what somebody else is saying and transcribing but taking it and putting it into your own words another way to practice retrieval is something called a concept map so you might take some ideas related to assertions and try and draw in a bit of a spider diagram how many things could be related to assertions oh what's related to evidence i'm going to need to think about materiality i'm going to need to think about procedures i know that for example for the existence assertion and the occurrence assertion i'm going to need to do more vouching for the accuracy valuation and allocation assertion i'm probably going to need to do some recalculation so the more that you can try and link your audit concepts together to draw a concept map of what the audit standard is all about or what the standards in general are all about then the better your brain is at retrieving that information from inside your memory because remember in the exam retrieval is what you need to do and application is what you need to do the other way that you can try and practice retrieval is try apply the standards in something that you see in everyday life you go into a restaurant you think oh what are the inherent risks do i identify any controls what sort of evidence could i use here a receipt what sort of documentation do the waiters or waitresses or the servers use some sort of electronic recording system so think about immersing yourself i talked to my students about being in the matrix of audit if you haven't seen the movie um it's the matrix is the movie there but you know looking at the world through that audit lens will help you apply the auditing standards now as a bonus what i'm also going to provide to you in the description is a link to a word document file that i've developed to help people understand the audit standards so you know it has some basic fields like what is the standard number what is the standard name asking you whether it's a standard about planning about gathering evidence or about reporting in the end it asks you to summarize the standards if you could give a two or three sentence summary of that standard and then some more detail a common mistake that students make is that they often just copy out the entire standard that just that to me doesn't make much sense if it helps you to remember that's great but you know summarize um you know the five main things that you need to do or the three main things the key points that you need to consider of what the auditor has to do in response to that standard now of course some standards are bigger than others asa 315 isa 315 is a massive standard and there's much more to think about in that one than there would be in uh for example asa 701 which is a bit more contained about key audit matters but um the other part that i think is really useful for people learning auditing and studying auditing is a section where i ask you about the judgments remember audit is all about professional judgment there are no rules that say this is exactly what you have to do or this is exactly what you have to do it gives you choices that say it says as the auditor you have to do this it's not an easy decision you have to make a professional judgment where there's perhaps no right answer and you have to take in all of the information that you have access to so in my template for you there's also a section to get you to think about where does the auditor have to make judgments where is it that they have to use their professional decision making and that'll help you understand where the complexity in that audit standard lies and where you need to focus on understanding the scenario the situation and what sort of information the auditor needs to be able to make those decisions now of course these are my top tips the ones that i've developed over a decade of teaching auditing and helping students on how to learn the auditing standards in a way that's easy and useful to their studies if you have a great way that you've used to learn the auditing standards i'd love for you to share it with our audit community in the comments we're all in this social distance learning together and learning online together one of the best things about youtube is the little community that seems to have popped up around my channel where people share their experiences and the knowledge so that we can all improve together so i want to thank you for watching this video if you thought it was useful obviously i'd always love a thumbs up consider subscribing and there are always plenty more videos coming out on my channel as well as on my free audit study guide on the amandaloves2audit.com website where you'll find all of my videos laid out really nicely in a sort of study format that'll help with most university and professional level courses thanks for watching stay safe stay well and i'll see you next time