Cessy Camila Amalya (01031381520116)

Deborah Anella (01031381621193)

Nesia Putri Selsi Wijaya (010131381621244)

Case 5.4 – St. James Clothiers

Worksheet for Answering Questions 1 and 2 Student Name:_____________________________

Risks of Manual System How Risks Impact Financial Statements New IT System Features that Mitigate Manual
Systems Risks
 International Standard on Auditing (ISA) 540
Auditing Accounting Estimates and Related Disclosure (Revised)

Objective of the auditor

The ED-540 requires the auditor, when dealing with accounting estimates with low inherent
risk, to determine whether one or more specific further audit procedures that may provide
sufficient appropriate audit evidence in the circumstances.

Objctive of the ISA

The objective of ED-540 is for the auditor to obtain sufficient appropriate audit evidence to
evaluate whether accounting estimates and related disclosures are reasonable in the context of
the applicable financial reporting framework, or are misstated. ED-540 includes enhanced
requirements for risk assessment procedures and the auditor’s work effort in responding to
the assessed risks of material misstatement to support this evaluation.

Requirements