Scoping of Account Balances & Classes of Transactions

Including Preliminary & Concluding Analytical Procedures

The Scoping of Account Balances & Classes of Transactions training is a core audit program focused on how engagement teams determine which areas of the financial statements require audit procedures under a risk-based audit approach. The course integrates the requirements of ISA 315, ISA 330, and ISA 520, emphasizing how materiality, risk assessment, and analytical procedures interact to drive scoping decisions.

This training reinforces that scoping is not a mechanical or purely quantitative exercise. Instead, it requires professional judgment, consideration of qualitative risk factors, and effective use of preliminary and concluding analytical procedures to ensure audit effort is directed to areas that matter most.

The training applies to:

• All statutory audits conducted under ISAs
• All material account balances, classes of transactions, and disclosures
• Engagement teams involved in audit planning, interim work, and completion

Strong scoping decisions are critical to audit efficiency, audit quality, and defensible conclusions.

Key Learning Objectives:

By the end of this training, participants will be able to:

• Explain the purpose of scoping within a risk-based audit framework.
• Apply quantitative scoping criteria using overall materiality and performance materiality.
• Identify qualitative factors that require balances or transaction classes to be scoped in despite being below quantitative thresholds.
• Use preliminary analytical procedures to support risk assessment and scoping decisions at the planning stage.
• Perform and evaluate concluding analytical procedures as part of audit completion.
• Understand and apply threshold concepts, including absolute and percentage movements.
• Apply extrapolation and roll-forward requirements when performing interim testing.
• Document scoping decisions clearly and in compliance with ISA requirements.

Who Should Attend:

This training is designed for:

• Audit Staff
• Senior Auditors
• Audit manager
• Audit partner

It is particularly relevant for team members transitioning into roles requiring greater judgment and planning responsibility.

Course Highlights:

Participants will explore:

• Purpose and Logic of Scoping in a Risk-Based Audit
  Understanding why scoping exists and how it ensures audit work focuses on material and high-risk areas.
• Quantitative and Qualitative Scoping Criteria
  Practical application of:
  • Performance materiality thresholds
  • Significant risk and high inherent risk considerations
  • Fraud susceptibility, related-party transactions, complex estimates, and regulatory sensitivity
• Scoping Sheet Methodology
  Step-by-step walkthrough of how to:
  • Evaluate all balances and transaction classes
  • Apply thresholds and qualitative judgment
  • Reassess scoping when aggregate scoped-out balances exceed overall materiality
• Preliminary Analytical Procedures (Planning Analytics)
  How to use analytics to:
  • Identify unusual movements and trends
  • Highlight potential risk areas
  • Validate or challenge initial scoping decisions
• Concluding Analytical Procedures (Completion Analytics)
  How concluding analytics support:
  • Final reasonableness of the financial statements
  • Consistency with audit evidence obtained
  • Identification of unresolved or unexpected fluctuations

Prerequisites:

Participants are encouraged to have:

• A basic understanding of audit planning and materiality concepts.
• Familiarity with:
  • ISA 315 (Risk Assessment)
  • ISA 330 (Responses to Assessed Risks)
  •  ISA 520 (Analytical Procedures)
• Prior exposure to analytical procedures and basic audit documentation.

No advanced technical accounting knowledge is required; the course is suitable for all audit teams performing financial statement audits.