Audit
AUDIT PLANNING AND RISK CHAPTER OBJECTIVE 1. AUDIT STRATEGY 2. AUDIT PLAN 3. AUDIT RISK ASSESSMENT 4. UNDERSTANDING THE ENTITY ………………………………………………………………………………………………………………. 1. AUDIT STRATEGY The audit strategy sets the scope, timing and direction of the audit. It allows the auditor to determine the following: The resources to deploy for specific audit areas (e.g. experience level, external experts); The
Continue reading INTERNAL CONTROLS CHAPTER OBJECTIVE I. INTERNAL CONTROL II. COMPONENTS OF INTERNAL CONTROL III. CATEGORIES OF INTERNAL CONTROLS …………………………………………………………………………………………….. I. INTERNAL CONTROL Internal control is the process designed and effected by management and others to provide reasonable assurance about the achievement of the entity’s objectives with regard to reliability of financial reporting, effectiveness and efficiency of operations and compliance with applicable
Continue reading THE AUDIT EVIDENCE PROCESS: TESTS OF CONTROL CHAPTER OBJECTIVE 1. THE CONCEPT OF AUDIT EVIDENCE 2. THE CHARACTERISTICS OF GOOD AUDIT EVIDENCE 3. SUFFICIENT , APPROPRIATE EVIDENCE 4. AUDIT TESTING PROCEDURES ……………………………………………………………………………………………… 1. THE CONCEPT OF AUDIT EVIDENCE Audit evidence can be defined in simple terms as any piece of information which assists the auditor to reach conclusion on the
Continue reading AUDIT -SAMPLING CHAPTER OBJECTIVE 1. AUDIT SAMPLING 2. SAMPLE SIZE 3. SAMPLE SELECTION 4. STATISTICAL AND NON-STATISTICAL SAMPLING 1. AUDIT SAMPLING Definition: Audit sampling as the application of audit procedures to less than 100% of the items (in population) with an account balance or class of transactions. Using Sampling in Auditing: Sampling is normally appropriate for areas in which there
Continue reading AUDIT VERIFICATION- GENERAL PRINCIPLES CHAPTER OBJECTIVE 1. AUDIT VERIFICATION TECHNIQUES 2. AUDIT OBJECTIVES AND FINANCIAL STATEMENT ASSERTION 3. ACCOUNTING ESTIMATES ……………………………………………………………………………………. 1. AUDIT VERIFICATION TECHNIQUES In verification work, the auditor will use substantive testing procedures to give evidence relating to the figures in the financial statements. Audit-testing procedures available to the auditor are: Inspection: Physical review or examination of records,
Continue reading 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
Continue reading 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.
Continue reading 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
Continue reading 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
Continue reading 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
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