General Audit

AUDIT VERIFICATION -INVENTORY CHAPTER OBJECTIVE 1. INVETNORY VALUATION 2. INVENTORY COUNT 3. THE AUDITOR’S WORK ON INVENTORY VALUATION ……………………………………………………………………………………………………….. 1.  INVENTORY VALUATION Definition: The term inventory includes raw materials, bought in parts, work-in-progress and finished goods. Inventory Valuation: IAS2 inventory requires individual inventories to be measured at the lower of cost and net realisable value. Inventory valuation methods such as

AUDIT VERIFICATION – NON-CURRENT ASSETS CHAPTER OBJECTIVE 1. NON-CURRENT ASSETS 2. COST OR VALUATION 3. LEASE AND NON-DEPRECIATION OF NON-CURRENT ASSETS 4. VERIFICATION PROCEDURE 1. NON-CURRENT ASSETS Non-current assets are those assets which are held for continuing use in the business and are not intended for resale. Non-current assets can be analysed as follows. 1. Intangible- have no physical existence. E.g.

AUDIT VERIFICATION – RECEIVABLES AND CASH & BANK CHAPTER OBJECTIVE 1. THE AUDIT OF RECEIVABLES 2. THE AUDIT OF BANK 3. THE AUDIT OF CASH BALANCES 1. THE AUDIT OF RECEIVABLES In order to verify the figure in the financial statements for receivables the auditor would perform a number of substantive procedures as outlined below. Control account: List of receivable

AUDIT VERIFICATION – LIABILITIES CHAPTER OBJECTIVE 1. LIABILITIES 2. TRADE PAYABLES –SUBSTANTIVE PROCEDURE 3. OVERDRAFTS AND LONG-TERM BANK LOANS 4. ACCRUALS 5. CONTINGENT LIABILITIES 1. LIABILITIES  Amounts falling due within one year ( current liabilities) must be shown separately in the financial statements from amounts falling due after more than one year ( non-current liabilities) for each item.  Liabilities

COMPUTERS IN AUDIT CHAPTER OBJECTIVE 1. THE USE OF COMPUTERS IN MANAGING THE AUDIT 2. INTERNAL CONTROL IN COMPUTER-BASED SYSTEMS 3. COMPUTRER-ASSISTED AUDIT TECHNIQUES (CAATs) 1. THE USE OF COMPUTERS IN MANAGING THE AUDIT Auditors now often use portable, laptop computers to assist in the management and performance of the audit and to complete the audit work. This has significantly

AUDIT- THE FINAL REVIEW STAGE CHAPTER OBJECTIVE 1. THE OVERALL REVIEW OF THE FINANCIAL STATEMENTS 2. THE GOING CONCERN REVIEW 3. SUBSEQUENT EVENTS 4. THE WRITTEN REPRESENTATIONS LETTER 5. THE MANAGEMENT LETTER 1. THE OVERALL REVIEW OF THE FINANCIAL STATEMENTS Before the audit report can be signed, the audit work needs to be reviewed. The elements of this overall review

THE AUDIT REPORT LEARNING OBJECTIVES 1. FORMAL AUDIT REPORT 2. THE UNMODIFIED AUDIT REPORT 3. THE MODIFIED AUDIT REPORT 4. EMPHASIS OF MATTER PARAGRAPH 1. FORMAL AUDIT REPORT  Title: Independent Auditor’s Report  Addressee: entity  Introductory Paragraph: Financial statements  Management’s Responsibility for the Financial Statements: preparation of F/S with IFRS and free from material misstatement whether due

THE AUDITOR’S LIABILITY CHAPTER OBJECTIVE 1. NEGLIGENCE 2. LIABILITY IN TORT 3. QUALITY CONTROL 1. NEGLIGENCE Negligence is some act or omission which occurs because the person concerned has failed to exercise the degree of care and skill appropriate to the circumstances. In simple terms, negligence is the legal term for carelessness. Auditors may face negligence claims under two distinct