CGA-CANADA

AUDITING 1 EXAMINATION
March 2005

Marks Time: 3 Hours

30 Question 1
Select the best answer for each of the following unrelated items. Answer each of these items in your
examination booklet by giving the number of your choice. For example, if the best answer for item (a)
is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will
not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations.

Note:
2 marks each

a. Who are the addressees in a standard audit report?

1) Management staff
2) The board of directors
3) The shareholders
4) All financial statement users who can be expected to rely on the audited financial statements

b. What does the term “presents fairly” mean in the standard audit report?
1) The audit has been conducted according to GAAS.
2) There are no misstatements in the audited financial statements.
3) The auditor used materiality when considering misstatements.
4) The financial statements are in conformity with GAAP.

c. Who signs the audit report?

1) The auditor who did most of the work
2) The auditor’s supervisor
3) The partner who does the independent review of the audit
4) The audit firm

d. Which assertion is the auditor most likely seeking evidence for with the following procedures in the
audit of manufacturing inventory?
• Review production reports and material requisition forms to verify quantity and description of raw
materials used.
• Review time cards and production reports to verify labour hours.

1) Completeness
2) Valuation
3) Ownership
4) Cutoff

e. A tour of the client’s plant to observe the fixed assets would provide evidence for which assertion?
1) Completeness
2) Valuation
3) Ownership
4) Existence

Continued...

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 f. For an audit of payroll, which of the following assertions is the least important?
1) Occurrence
2) Ownership
3) Completeness
4) Valuation

g. Which cycle would the following accounts pertain to: goodwill, bonds payable, advances to
subsidiaries?
1) Payroll
2) Finance and investment
3) Acquisition and expenditure
4) Capital assets

h. Which of the following procedures would provide evidence for the accounting objective in the audit of
notes payable?
1) Compare bank due notices with recorded liabilities
2) Verify that notes payable records are maintained by someone who cannot sign notes or cheques
3) Reconcile sub-ledger for notes payable to general ledger control account
4) Verify that cancelled notes are stamped as “paid”

i. When auditing long-term debt in the finance and investment cycle, which of the following is the
auditor primarily concerned with?
1) Proper period
2) Management override of controls
3) Completeness
4) Authorization

j. JJJ Corporation is the parent company of a subsidiary that operates in Mexico. JJJ has been in
existence for many years and has a strong capital structure with very little debt. Therefore, JJJ is able
to borrow at terms more favourable than its subsidiary. For many years, JJJ borrowed all of the
long-term financing required by the subsidiary and then re-loaned the funds to the subsidiary at no
extra charge. JJJ recorded no revenue but had some borrowing expense. This led to a tax problem and
so this year, JJJ is merely acting as guarantor whenever a subsidiary needs to borrow funds. JJJ now
records no revenue and no net expense from the new arrangement but the subsidiary still gets
financing at preferred rates. What audit issue(s) arise from this arrangement?
1) The audit report will have to be qualified with an explanatory paragraph for the guarantee.
2) JJJ should record a fee for the guarantee; therefore, its revenue is understated.
3) Off-balance-sheet financing of the subsidiary affects the consolidated financial statements.
4) The auditor has to determine the likelihood that the guarantee will have to be honoured as well as
determining if a reasonable estimate of the guarantee amount is possible.

k. Which of the following would a law firm not state as its response in a legal representation letter?
1) That the client has no outstanding or possible claims
2) That the representations regarding the nature, status, and possible outcomes of claims or possible
claims made in the enquiry letter are reasonable
3) That they do not agree with one or all the representations regarding the nature, status, and possible
outcomes of claims or possible claims
4) That there are claims or possible claims that were omitted from the enquiry letter

Continued...

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 l. Which of the following events, occurring after the balance sheet date, would be a Type I subsequent
event?
1) Shares were issued.
2) Inventory was lost in a fire.
3) An accounts receivable that was listed as doubtful on the balance sheet date due to the customer’s
financial circumstances must be written off because the customer went bankrupt.
4) A lawsuit was settled for an event occurring after the balance sheet date.

m. Which of the following procedures would likely be the least effective in detecting related-party
transactions?
1) Enquiries of management
2) Review of the minutes of board of directors’ meeting
3) Analysis of one-time vendors
4) Auditor’s knowledge of the business and industry

n. Which of the following would be considered the strongest form of evidence?

1) Documentary evidence that has originated outside the client’s data processing system, but that has
been received and processed by the client
2) Internal evidence consisting of documents that are produced, circulated, and stored within the
client’s information system
3) Documentary evidence obtained directly from independent external sources
4) An auditor’s direct personal knowledge obtained through physical observation

o. Annie’s audit manager has asked her to prepare a preliminary estimate of materiality, based on assets.
The client reported $7 million of after-tax income, including a $2.5 million extraordinary gain, and
has reported total assets of $88 million. What amount(s) would be reasonable for Annie to suggest for
her preliminary estimate of overall materiality?
1) $225,000
2) $350,000
3) $440,000 to $880,000
4) $225,000 to $450,000

10 Question 2
There are several characteristics that distinguish a computerized accounting environment from a manual
accounting environment. For example, transaction trails may exist only for a short time, or only in
machine-readable form.

Required
Identify five of these distinguishing characteristics, other than the one noted above. For each characteristic,
provide one example of how this could affect the audit. Prepare your answer in the following format:

Characteristic Audit Implication

• Transaction trails may exist only for a short • Auditors may have to rely on computer-
time, or only in machine-readable form. assisted audit techniques or auditing through
the computer.

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9 Question 3
For the past 4 years, Grace has been assigned to the audit of BBB Inc., a company that has 3 retail stores in
the city. This repeat assignment is helpful because she is now very familiar with the industry and the
management staff at BBB. This year, she has been promoted to senior auditor and has encountered some
difficulties with the new controller at BBB. When she asked for some subsidiary records, she was told that
the controller had instructed the accounting staff that all requests would have to be cleared first through his
office. Any records requested would be reviewed by the controller, who would then provide them to
Grace. When Grace met with the controller to discuss this situation, the controller explained that he simply
wanted to ensure that the records were adequate for review so as not to waste her time. He also suggested
that she not confirm the payables as he had found this to be a waste of time in his previous job. The
controller explained that he had been an auditor for several years before coming to work for BBB and
knew what was required for an audit.

Required
3 a. Briefly explain programming independence and provide an example of a violation of programming
independence from the audit of BBB. If there is no example, state this in your answer.

3 b. Briefly explain investigative independence and provide an example of a violation of investigative

independence from the audit of BBB. If there is no example, state this in your answer.

3 c. Briefly explain reporting independence and provide an example of a violation of reporting

independence from the audit of BBB. If there is no example, state this in your answer.

13 Question 4
Ann is an audit manager with a small public accounting firm. A new student has been assisting on the
audit. Unfortunately, Ann has discovered that the student’s working papers are not up to the firm’s
standards. The audit is now almost completed and Ann must make recommendations to be presented to the
partner in charge for the audit opinion.

Required
8 a. Identify four problems that the firm could face as a result of the poor working paper preparation.

5 b. Assume that Ann is able to correct all deficiencies in the student’s working papers by doing extra
work. Explain why information risk still exists. Include an explanation of what information risk is and
three sources of information risk.

11 Question 5
For each of the following independent statements, state whether you agree or disagree with the statement
and explain your answer.

Required
4 a. Overall audit risk is low when inherent risk is high.

3 b. When the auditor assesses control risk and inherent risk as low, the acceptable detection risk is low.

4 c. Sample size is determined by population size.

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17 Question 6
John is a junior auditor who developed the following audit program for accounts receivable. The interim
audit is to be completed by the end of October and the year end is December 31.

Audit procedure Nature Extent Timing

Select a sample of accounts Analytical Choose 3% of all Interim audit
from listing prepared by client. procedures accounts
Send negative confirmations to Confirmation All accounts with a Interim audit
selected accounts. balance
Send negative confirmations to Confirmation All accounts from Year-end audit
selected accounts. interim sample with a
zero balance at year end

Required
4 a. Based on the sampling method in John’s program, does it appear that John has assessed the control
risk as high or low? Explain your answer.

4 b. Assume that the audit manager disagreed with John’s assessment of the control risk. State how each of
the above procedures should be modified to reflect the audit manager’s assessment of the control risk.

3 c. State the three questions that an auditor is concerned with when designing a test of controls.

3 d. State three instances or factors that would suggest that an auditor could consider using non-statistical
sampling methods.

3 e. State three possible causes of non-sampling risk.

10 Question 7
RRR is a franchise business dealing in rental equipment. Franchisees purchase or lease rental equipment
from RRR, then rent out items on a day-to-day basis to their customers at rates approved by RRR.
According to the franchise agreement, RRR earns a percentage of sales revenue from each franchisee
store, and RRR requires annual audited financial statements from the franchisee companies.

In a franchisee store, rental revenues can be cash or on credit for approved customers. A rental clerk
records the sale (rental) on a sales invoice after verifying the price against the authorized price list, and
also keys the rental information into a database listing all of the store’s equipment, so that the store can tell
at any time which equipment is on hand. The store accountant records the sales invoice in the sales
journal. The cash receipts clerk records the cash in a cash receipts journal. The store manager compiles a
remittance list, which is used at the end of the day to prepare a bank deposit. When credit sales are made,
the store maintains the information in the sub-ledgers. Sales invoices are serially pre-numbered.

Required
For each of the following control objectives, identify the population for sample selection and prepare at
least two audit procedures to test the objective: completeness of sales, accuracy of sales, completeness of
cash receipts, authorization of sales, and validity of receivables for a franchisee store.

END OF EXAMINATION

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 AUDITING 1 [AU1]
EXAMINATION

Before starting to write the examination, make sure that it is complete and that there are no
printing defects. This examination consists of 5 pages. There are 7 questions for a total of
100 marks.

READ THE QUESTIONS CAREFULLY AND ANSWER WHAT IS ASKED.

To assist you in answering the examination questions, CGA-Canada includes the following glossary
of terms.

Glossary

From David Palmer, Study Guide: Developing Effective Study Methods (Vancouver: CGA-Canada, 1996).
Copyright David Palmer.

Compare Examine qualities or characteristics that
resemble each other. Emphasize similarities,
although differences may be mentioned.
Contrast Compare by observing differences. Stress
the dissimilarities of qualities or
characteristics. (Also Distinguish between)
Criticize Express your own judgment concerning the
topic or viewpoint in question. Discuss both
pros and cons.
Define Clearly state the meaning of the word or
term. Relate the meaning specifically to the
way it is used in the subject area under
discussion. Perhaps also show how the item
defined differs from items in other classes.
Describe Tell the whole story in narrative form.
Diagram Give a drawing, chart, plan or graphic
answer. Usually you should label a diagram.
In some cases, add a brief explanation or
description.
Discuss This calls for the most complete and detailed
answer. Examine and analyze carefully and
present both pros and cons. To discuss
briefly requires you to state in a few
sentences the critical factors.
Evaluate This requires making an informed judgment.
Your judgment must be shown to be based
on knowledge and information about the
subject. (Just stating your own ideas is not
sufficient.) Cite authorities. Cite advantages
and limitations.
Explain In explanatory answers you must clarify the
cause(s), or reasons(s). State the "how" and
"why" of the subject. Give reasons for
differences of opinions or of results.
Illustrate Make clear by giving an example, e.g., a
figure, diagram or concrete example.
Indicate Provide a short explanation.
Interpret Translate, give examples of, solve, or
comment on a subject, usually making a
judgment on it.
Justify Prove or give reasons for decisions or
conclusions.
List Present an itemized series or tabulation.
Be concise. Point form is often
acceptable. (Also Enumerate or Identify)
Outline This is an organized description. Give a
general overview, stating main and
supporting ideas. Use headings and
sub-headings, usually in point form. Omit
minor details.
Prove Establish that something is true by citing
evidence or giving clear logical reasons.
Relate Show how things are connected with each
other or how one causes another,
correlates with another, or is like another.
Review Examine a subject critically, analyzing
and commenting on the important
statements to be made about it.
State Present the main points in brief, clear
sequence, usually omitting details,
illustrations, or examples.
Summarize Give the main points or facts in condensed
form, like the summary of a chapter,
omitting details and illustrations.
Trace In narrative form, describe progress,
development, or historical events from
some point of origin.
 CGA-CANADA

AUDITING 1 EXAMINATION
March 2005
SUGGESTED SOLUTIONS

Marks Time: 3 Hours

30 Question 1
Note:
2 marks each

Sources:
a. 3) Topic 1.5 (Level 1)
b. 4) Topic 1.5 (Level 1)
c. 4) Topic 1.5 (Level 1)
d. 2) Topic 9.4 (Level 2)
e. 4) Topic 9.6 (Level 2)
f. 2) Topic 9.9 (Level 1)
g. 2) Topic 9.10 (Level 1)
h. 3) Topic 9.11 (Level 2)
i. 3) Topic 10.2 (Level 2)
j. 4) Topic 10.5 (Level 1)
k. 1) Topic 10.5 (Level 2)
l. 3) Topic 10.6 (Level 1)
m. 3) Topic 10.5 (Level 1)
n. 4) Topic 3.4 (Level 1)
o. 3) Topic 4.4 (Level 1)

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10 Question 2
Source: Topics 7.1 and 7.2 (Level 1)
Characteristic
• Specialized knowledge may be required to
effectively conduct the audit.
• Uniform processing of transactions means that
if a program has errors, the program will
process all identical transactions incorrectly,
eliminating random errors.
• Segregation of functions — many internal
control procedures may be performed by the
computer rather than by different people.
• Record-keeping functions are concentrated.
• The lack of source documents will likely make
it impossible to reconstruct data files if backup
is inadequate.
• Transactions may be initiated or subsequently
executed automatically by the computer.
• Potential for errors and irregularities due to
unauthorized access.
• Potential for increased management
supervision.
Note:
1 mark for each characteristic to a maximum of 5 marks. 1 mark for each audit implication to a maximum of 5 marks. Only 1 audit
implication per characteristic will be awarded a mark.
SAU1M05 ©CGA-Canada, 2005
Audit Implication
• The auditor will have to determine if an IT
specialist needs to be brought into the audit
team and how this will affect the nature,
extent, and timing of audit procedures.
• Emphasis should be to test a small number of
unusual or exceptional transactions rather than
a large number of similar transactions.
• Auditor must verify that there have been no
unauthorized changes to the software.
• People who have access to the computer may
be able to perform incompatible functions.
• The approach to auditing requires a change
that puts more emphasis on the evaluation of
internal controls of the computer centre.
• The backup and recovery procedures of online
systems should also be carefully reviewed by
the auditor.
• Authorizations can be part of a program and
therefore not documented.
• Auditors should be particularly concerned
with access control and security of online
systems because there may be no evidence of
unauthorized access.
• Access issues apply to both users and
programmers.
• Internal controls may be enhanced and control
risk reduced.
Page 2 of 6
9 Question 3
Source: Topic 2.1 (Level 1)

3 a. Programming independence means that an auditor must remain free from interference from clients
who try to restrict, specify, or modify the procedures the auditor wants to conduct, including any
attempt to assign personnel or otherwise control the work that they do. The controller’s suggestion
that Grace not to confirm the payables is an example of a violation of programming independence.
3 b. Investigative independence means that an auditor must have free access to books, records,
correspondence, and other evidence. The auditor must have the cooperation of management without
any attempt to interpret or screen evidence. The controller’s instruction that subsidiary records
requested by the auditor must first be reviewed by him is a violation of investigative independence.
3 c. Reporting independence means that the auditor must not let feelings of loyalty to the client interfere
with the obligation to report fully and fairly. Neither should the client be allowed to overrule the
auditor’s judgment on what should be included in the audit report. There is no example of a violation
of reporting independence in the BBB audit.
Note:
2 marks for the explanation, and 1 mark for the example or for stating that there is no example for part (c)

13 Question 4
8 a. Source: Topic 3.6 (Level 1)
• The auditor will be forced to rely on memory to support decisions made and conclusions reached
during the audit.
• Relying on memory will increase the chance of error in assessing the accumulated evidence, and
could lead to an incorrect opinion.
• It will be difficult to defend work done or to demonstrate due care (or lack of negligence) in court
without a written record of the work performed.
• A meaningful file review may be impossible because the reviewer will have to rely on the auditor’s
memories of work performed, increasing the chance that problems will be missed.
• Planning for next year’s audit will be more difficult without a record of the problems and issues
identified this year.
• It appears that the student was not adequately trained or supervised; therefore, there may be a
concern that the general and examination standards were not met.
Note:
2 marks per bulleted item to a maximum of 8 marks

5 b. Source: Topic 1.1 (Level 1)

• Information risk is the risk to users of the financial statements that the financial statements will be
materially false and misleading.
• Auditors are hired to reduce information risk, but they cannot eliminate it entirely.

Note:
1 mark per bulleted item to a maximum of 2 marks

Sources of information risk:

• Asymmetry of information between management and users of financial statements (an explanation
is sufficient)
• The errors that arise from a weak accounting system
• The errors that arise from incompetent employees
• The possibility of deceptive accounting practices

Note:
1 mark per bulleted item to a maximum of 3 marks

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11 Question 5
4 a. Source: Topic 4.7 (Level 1)
Disagree
• Overall audit risk is determined by three factors: inherent risk, control risk, and detection risk.
• The auditor chooses the required overall audit risk, and then assesses the inherent risk and the
control risk.
• The auditor then selects the detection risk required in order to attain the desired overall audit risk.

Note:
1 mark for Disagree and 1 mark for each bulleted item to a maximum of 4 marks

3 b. Source: Topic 4.7 (Level 1)

Disagree
• There should be an inverse relationship between the combined degree of inherent and control risks
and the detection risk established by the auditor.
• Therefore, the acceptable detection risk would be high in this situation.

Note:
1 mark for Disagree and 1 mark for each bulleted item to a maximum of 3 marks

4 c. Source: Topic 6.5 (Level 2)

Disagree
• The lower the sampling risk, the larger the sample.
• The lower the tolerable misstatement, the larger the sample.
• The larger the expected dollar misstatement, the larger the sample.
• The more variability within the population, the larger the sample.

Note:
1 mark for Disagree and 1 mark per bullet to a maximum of 4 marks

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17 Question 6
4 a. Source: Topics 5.1 and 5.7 (Level 1)
• John’s program would only be appropriate if the control risk is assessed as being low.
• John is using analytical procedures as his only other test besides confirmation.
• He is collecting sample evidence at the interim date.
• He is using negative rather than positive confirmations.

Note:
1 mark for stating low control risk and 1 mark for each bulleted item to a maximum of 4 marks

4 b. Source: Topics 5.1 and 5.7 (Level 1)

• High control risk should use a larger sample size.
• Confirmations should be positive.
• Consider sampling only at year end, not at the interim date.
• Confirmations should be sent to all accounts in the sample.

Note:
1 mark for each bulleted item to a maximum of 4 marks

3 c. Source: Topic 5.6 (Level 1)

• Was the control used as intended?
• Was the control effective?
• Was the control applied throughout the entire period under audit?

Note:
1 mark per bullet to a maximum of 3 marks

3 d. Source: Topic 6.2 (Level 2)

• The association of population items with random numbers is difficult and expensive.
• The auditor has sufficient knowledge about the population to justify a basis for a non-statistical
sample with expectation of a reasonable conclusion about the population.
• A representative sample is not required (for example, because a non-statistical sample of large
items would leave an immaterial amount unaudited).
• The population is known to be diverse, with some segments especially error-prone.

Note:
1 mark per bullet to a maximum of 3 marks

3 e. Source: Topic 6.3 (Level 2)

• Misjudging the inherent risk
• Misjudging the control risk
• Poor choice of procedures (for example, an audit test is not appropriate)
• Mistakes in conducting the audit procedure
• Mistakes in interpreting the results
• Auditor lacks proper training

Note:
1 mark per bullet to a maximum of 3 marks

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10 Question 7
Source: Topic 8.3 (Level 2)

Completeness of Sales
• Select a sample of sales invoices from the audit period.
• Scan a sample of sales invoices to ensure all numbers are accounted for in the sales journal.

Accuracy of Sales
• Select a sample of recorded sales invoices in the sales journal from the audit period.
• Perform recalculations of amounts, based on approved rental rate listing.

Completeness of Cash Receipts

• Select a sample of remittance listings from the audit period.
• Trace to cash receipts journal to verify inclusion in the cash receipt journal.

Authorization of Sales
• Select a sample of recorded sales invoices in the sales journal for the audit period.
• Compare credit sales to approved customer list.
• Vouch prices to approved rental rate listing.

Validity of Receivables
• Select a sample of customers’ accounts from sub-ledgers.
• Vouch debits to supporting sales invoices.
• Vouch credits to supporting cash receipts documents and credit memos.
• Observe mailing of monthly customer statements.

Note:
1
/2 mark for sample selection in each control objective (must identify population); 11/2 marks for procedures to a maximum of 2 marks per
control objective. Any other reasonable audit procedures accepted.

END OF SOLUTIONS

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 CGA-CANADA

AUDITING 1 EXAMINATION
March 2005
EXAMINER’S COMMENTS

General Comments
The overall performance on this examination was satisfactory.

Students demonstrated a very good awareness of independence, audit documentation, internal control
issues, and non-statistical sampling. Areas that students should pay closer attention to include audit
procedures and the relationship between detection risk and audit risk. They should also take care to read
the examination questions more carefully.

Specific Comments
Question 1 Multiple choice (Levels 1 and 2)
This question was answered satisfactorily.

Question 2 Factors that make computer systems different from manual systems (Level 1)
Although only five factors were required, some students provided more than five factors. This is a good
strategy for examinations as long as there is sufficient time. In this case, it enabled students whose answers
may have included some incorrect items to still obtain full marks.

Question 2 provided students with an example as a guide for the format of their answers. Some students
provided this given example as one of their own examples. Students waste time in repeating such answers
because they are not awarded marks. Other common weaknesses include repeating vague answers and
listing problems that could occur in manual systems as well as computer systems.

Question 3 Fundamental principles in codes of conduct for professional accountants (Level 1)

This question was answered very well. However, some students did not provide an example as required in
each part of the question. As well, some answers were too brief and did not cover all of the essential points.

Question 4 The purpose of working papers in auditing; the form and content of documentation required, the
causes of information risk, how audits reduce information risk (Level 1)
Performance was excellent in part (a). Again, even though only four items were required, students who
provided more than four increased their chances of obtaining full marks. Part (b) was not answered as well,
with many students missing the point that an audit can never eliminate information risk. Some students
confused information risk with asymmetry, which is a cause of information risk.

Question 5 The audit risk model; The relationship between variations in audit risk components; Determining
sample size (Levels 1 and 2)
Students who did not do well in part (a) usually answered that audit risk would be adjusted downwards by an
increase in inherent risk. This is a confusion of audit risk and detection risk. Audit risk is controlled by the
auditor by adjusting detection risk. Some students provided the audit risk model and stated that if all of the
other factors are held constant and IR then increases, so does AR. However, this is not what the question deals
with. Students should ensure that they understand which risk factors are under the auditor’s control, and which
are not, and how the auditor deals with a high risk in any of the uncontrollable factors.

Parts (b) and (c) were answered well. In part (c), some students did not provide a complete explanation of their
Agree or Disagree statement. In this type of question, marks are awarded for the explanation even if the Agree
or Disagree statement is incorrect.

Continued...

©CGA-Canada, 2005
 Question 6 Management vs auditor responsibility regarding internal controls, internal control objectives of
interest for both management and auditor, how audit strategy is affected by study and evaluation of
internal control, nature and extent of tests of controls, reasons why auditor use sampling,
terminology used in audit sampling (Levels 1 and 2)
Performance was excellent in parts (a), (b), and (d). In part (a), some students appeared to confuse high
CR with low CR, and some students argued that analytical procedures were tests of controls. Alternative
answers were considered as long as the student’s answer in part (b) was consistent with their answer in
part (a). Some students were not aware of the three main concerns that an auditor has regarding internal
controls, as tested in part (c). For example, there is little point in designing a test of a control that is not
considered to be effective, or was not used as intended, or was not used throughout the relevant period.
Students who did not obtain full marks for part (e) either gave less than three points in their answer, or
answered by trying to define what non-sampling risk is (that is, all types of risk other than sampling risk).
Again, students are cautioned to ensure that their answer is consistent with the specific question in the
Required. A definition, no matter how accurate, cannot be awarded any marks if it is not part of the
Required.

Question 7 Control objectives pertaining to the revenue and collection cycle (Levels 1 and 2)
Many students did very well on this question, but others had difficulty with it. Common errors included
providing procedures relevant for authorization as a test of completeness, not indicating which population
samples were drawn from, or identifying a population that had no relevance to the objective being tested.
An audit procedure should be clear as to its purpose, what it is trying to prove, and what evidence it will
provide, and the evidence should be tied to a general ledger account. Audit procedures are essential to any
audit and students must demonstrate a clear understanding of them.

AU1M05 ©CGA-Canada, 2005