Audit Responsibilities

and Objectives
Chapter 6

6-1

Learning Objective 1
Explain the objective of
conducting an audit of
financial statements.

6-2

Objective of Conducting an Audit

of Financial Statements

The purpose of an audit is to provide financial

statement users with an opinion by the auditor
on whether the financial statements are
presented fairly, in all material respects, in
accordance with applicable financial accounting
framework.

6-3

Steps to Develop
Audit Objectives
1

Understand objectives and

responsibilities for the audit.

Divide financial statements

into cycles.

Know management
assertions about accounts.

Know general audit objectives for classes

of transactions, accounts and disclosures.

Know specific audit objectives for classes

of transactions, accounts and disclosures.
6-4

Learning Objective 2
Understand objectives and
responsibilities for the audit.
Divide financial statements
into cycles.
Know management
assertions about accounts.
Know general audit objectives
for classes of transactions,
accounts and disclosures.
Know specific audit objectives
for classes of transactions,
accounts and disclosures.

Distinguish managements
responsibilities for preparing
financial statements from the
auditors responsibilities for
verifying those financial
statements.
6-5

Responsibilities
Management is responsible
for the financial statements,
and for internal control.
Auditors issue an
opinion on fairness
of the financial statements.

6-6

Learning Objective 3
Understand objectives and
responsibilities for the audit.
Divide financial statements
into cycles.
Know management
assertions about accounts.

Explain the auditors

responsibility for discovering
material misstatements.

Know general audit objectives

for classes of transactions,
accounts and disclosures
Know specific audit objectives
for classes of transactions,
accounts and disclosures.

6-7

Auditors Responsibilities
PSA No. 02 (SA Seksi 110 para 02)
Auditor bertanggungjawab untuk merencanakan dan
melaksanakan audit untuk memperoleh keyakinan memadai
apakah laporan keuangan bebas dari salah saji material, baik yang
disebabkan oleh kekeliruan atau kecurangan. Oleh karena sifat
bukti audit dan karakteristik kecurangan, auditor dapat
memperoleh keyakinan memadai, namun bukan mutlak, bahwa
salah saji material terdeteksi. Auditor tidak bertanggungjawab,
untuk merencanakan dan melaksanakan audit guna memperoleh
keyakinan bahwa salah saji terdeteksi., baik yang disebabkan oleh
kekeliruan atau kecurangan, yang tidak material terhadap laporan
keuangan.
6-8

Auditors Responsibilities
Material versus immaterial misstatements
Reasonable assurance versus absolute

Sampling
Estimates

Errors versus fraud

Professional skepticism

6-9

Responsibilities for
Discovering Illegal Acts

Illegal acts are defined as violations of laws

or government regulations other than fraud.
Examples: a violation of tax laws and a violation
of the environmental protection laws.

6 - 10

Responsibilities for
Discovering Illegal Acts
Direct-effect illegal acts
Indirect-effect illegal acts
Evidence accumulation when there is no reason
to believe indirect-effect illegal act exists
Evidence accumulation and other actions when there
is reason to believe direct- or indirect-effect
illegal acts may exist
Actions when the auditor
knows of an illegal act
6 - 11

Learning Objective 4
Understand objectives and
responsibilities for the audit.
Divide financial statements
into cycles.
Know management
assertions about accounts.
Know general audit objectives
for classes of transactions,
accounts and disclosures.
Know specific audit objectives
for classes of transactions,
accounts and disclosures.

Classify transactions and

account balances into
financial statement
cycles and identify benefits
of a cycle approach to
segmenting the audit.
6 - 12

Transaction Flow Example

Transactions

Journals

Sales

Sales journal

Cash receipts

Cash receipts journal

Acquisition
of goods and services

Acquisitions
journal

Cash
disbursements

Cash disbursements journal

Payroll
services and
disbursements

Payroll
journal

Allocation and
adjustments

General
journal

Ledger, Trial Balance, and

Financial Statements
General ledger
and subsidiary
records

General ledger
trial balance

Financial
statements
6 - 13

Relationships Among
Transaction Cycles
General
cash
Capital acquisition
and repayment cycle
Sales and
collection
cycle

Acquisition
and payment
cycle

Payroll and
personnel
cycle

Inventory and
warehousing
cycle
6 - 14

Learning Objective 5
Understand objectives and
responsibilities for the audit.
Divide financial statements
into cycles.
Know management
assertions about accounts.
Know general audit objectives
for classes of transactions,
accounts and disclosures.

Describe why the auditor obtains

a combination of assurance by
auditing classes of transactions
and ending balances in accounts,
including presentation and
disclosure.

Know specific audit objectives

for classes of transactions,
accounts and disclosures.

6 - 15

Balance and Transactions

Affecting Balances Example
Accounts Receivable (in thousands)
Beginning balance $ 19,454

Sales

Ending balance

144,328

139,020

Cash
receipts

1,242

Sales returns
and allowances

3,328

Charge-off of
uncollectible
debts

$ 20,197
6 - 16

Learning Objective 6

Distinguish among the three categories

of management assertions about
financial information.

6 - 17

Broad Definition of Auditing

Assertions are representations by
management that are embodied in financial
statement components, records, or systems
Example:
The financial statements represent fair
measurements of the economic events and
business transactions that affected the
organization during a certain period of time.
6 - 18

Management Assertions
Assertions about classes of
transactions and events for
the period under audit
Assertions about account
balances a period end

Assertions about presentation

and disclosure
6 - 19

Management Assertions for

Each Category of Assertions
Assertions About Classes
of Transactions and Events

Assertions About
Assertions About
Account Balances Presentation and Disclosure

Occurrence

Existence

Occurrence and rights

and obligations

Completeness

Completeness

Completeness

Accuracy

Valuation and
allocation

Accuracy and
valuation
Classification and
understandability

Classification

Cutoff
Rights and
obligations
6 - 20

Learning Objective 7
Understand objectives and
responsibilities for the audit.
Divide financial statements
into cycles.
Know management
assertions about accounts.

List the six general transactionrelated audit objectives to the

management assertions.

Know general audit objectives

for classes of transactions,
accounts and disclosures.
Know specific audit objectives
for classes of transactions,
accounts and disclosures.

6 - 21

Transaction-Related
Audit Objectives
Occurrence

Recorded
transactions exist.

Completeness

Existing transactions
are recorded.

Accuracy

Recorded transactions
are stated at the
correct amount.
6 - 22

Transaction-Related
Audit Objectives
Posting and
summarization

Transactions are included

in the master files and
are correctly summarized.

Classification

Transactions are
properly classified.

Timing

Transactions are recorded

on the correct dates.
6 - 23

Management Assertions and

Transaction-related Audit Objectives
Hillsburg Hardware Company:
As Applied to Sales Transactions
Management Assertions
About Classes of
Transactions and Events

General Transactionrelated Audit

Objectives

Specific Sales Transactionrelated Audit Objectives

Occurrence

Occurrence

Recorded sales are for

shipments made to
nonfictitious customers

Completeness

Completeness

Existing sales
transactions are recorded

Accuracy

Accuracy

Recorded sales are for

the amount of goods
shipped and are correctly
billed and recorded
6 - 24

Management Assertions and

Transaction-related Audit Objectives
Hillsburg Hardware Company:
As Applied to Sales Transactions
Management Assertions
About Classes of
Transactions and Events

General Transactionrelated Audit

Objectives

Specific Sales Transactionrelated Audit Objectives

Accuracy

Posting and
summarization

Sales transactions are

properly included in the
master file and are
correctly summarized

Classification

Classification

Sales transactions are

properly classified

Cutoff

Timing

Sales transactions are

recorded on the correct
dates.
6 - 25

Learning Objective 8
Understand objectives and
responsibilities for the audit.
Divide financial statements
into cycles.
Know management
assertions about accounts.

Link the eight general balancerelated audit objectives to the

five management assertions.

Know general audit objectives

for classes of transactions
and accounts.
Know specific audit objectives
for classes of transactions
and accounts.

6 - 26

General Balance-Related
Audit Objectives
Existence

Amounts
included exist.

Completeness

Existing amounts
are included.

Accuracy

Amounts included
are stated at the
correct amounts.
6 - 27

General Balance-Related
Audit Objectives
Classification

Amounts are
properly classified.

Cutoff

Transactions are recorded

in the proper period.

Detail tie-in

Account balances agree

with master file amounts,
and with the general ledger.
6 - 28

General Balance-Related
Audit Objectives
Realizable
value

Assets are included at

estimated realizable value.

Rights and
obligations

Assets must be owned.

6 - 29

Management Assertions and

Transaction-related Audit Objectives
Hillsburg Hardware Company:
As Applied to Inventory
Management Assertions General BalanceAbout Account Balances
related Audit
Objectives

Specific Balance-related Audit

Objectives Applied to Inventory

Existence

Existence

All recorded inventory exists

at the balance sheet date

Completeness

Completeness

All existing inventory has

been counted and included
in the inventory summary

6 - 30

Management Assertions and

Transaction-related Audit Objectives
Hillsburg Hardware Company:
As Applied to Inventory
Management Assertions General BalanceAbout Account Balances
related Audit
Objectives

Valuation and
allocation

Accuracy

Specific Balance-related Audit

Objectives Applied to Inventory

Inventory quantities on the

clients perpetual records
agree with items physically
on hand
Prices used to value
inventories are materially
correct
Extensions of price times
quantity are correct and
details are correctly added
6 - 31

Management Assertions and

Transaction-related Audit Objectives
Hillsburg Hardware Company:
As Applied to Inventory
Management Assertions General BalanceAbout Account Balances
related Audit
Objectives

Valuation and
allocation

Classification

Cutoff

Specific Balance-related Audit

Objectives Applied to Inventory

Inventory items are properly

classified as to raw
materials, work in process,
and finished goods
Purchase cutoff at year end
is proper
Sales cutoff at year end is
proper

6 - 32

Management Assertions and

Transaction-related Audit Objectives
Hillsburg Hardware Company:
As Applied to Inventory
Management Assertions General BalanceAbout Account Balances
related Audit
Objectives

Valuation and
allocation

Detail tie-in
Realizable
value

Rights and obligations

Rights and
obligations

Specific Balance-related Audit

Objectives Applied to Inventory

Total of inventory items

agrees with general ledger
Inventories have been written
down where net realizable
value is impaired
The company has title to all
inventory items listed
Inventories are not pledged
as collateral
6 - 33

Learning Objective 9

Link the four presentation and

disclosure-related audit objectives to
management assertions for
presentation and disclosure.

6 - 34

Management Assertions and Presentation

and Disclosure-related Audit Objectives
Hillsburg Hardware Company:
As Applied to Notes Payable
Management
Assertions About
Presentation and
Disclosure

General
Presentationand Disclosurerelated Audit
Objectives

Specific Presentation and

Disclosure-related Audit Objectives
Applied to Notes Payable

Occurrence
and rights and
obligations

Occurrence
and rights and
obligations

Notes payable as described in the

footnotes exist and are
obligations of the company

Completeness

Completeness

All required disclosures related

to notes payable are included in
the financial statement footnotes

6 - 35

Management Assertions and Presentation

and Disclosure-related Audit Objectives
Hillsburg Hardware Company:
As Applied to Notes Payable
Management
Assertions About
Presentation and
Disclosure

General
Presentationand Disclosurerelated Audit
Objectives

Specific Presentation and

Disclosure-related Audit Objectives
Applied to Notes Payable

Valuation and
allocation

Valuation and
allocation

Footnote disclosures related to

notes payable are accurate.

Classification
Classification
and
and
understandability understandability

Notes payable are appropriately

classified as to short-term and
long-term obligations and
related financial statement
disclosures are understandable
6 - 36

Learning Objective 10
Explain the relationship
between audit objectives
and the accumulation
of audit evidence.

6 - 37

How Audit Objectives

Are Met
Auditors plan the combination
of objectives and evidence by
following an audit process.
An audit process is a methodology
for organizing an audit.

6 - 38

Four Phases of an Audit

Phase I

Plan and design

an audit approach.

Phase II

Perform tests of
controls and
substantive tests
of transactions.

Phase III

Perform analytical
procedures and
tests of details
of balances.

Phase IV

Complete the
audit and issue
an audit report.
6 - 39

Tugas
Bacalah standar auditing berikut ini:
SA Seksi 110 (PSA 02)
SA Seksi 150 (PSA 01)
SA Seksi 201 (PSA 04)
SA Seksi 210 (PSA 04)
SA Seksi 220 (PSA 04)
SA Seksi 230 (PSA 04)
6 - 40

End of Chapter 6

6 - 41

Audit Evidence

Chapter 7

6 - 42

Broad Definition of Auditing

Auditing is a systematic process of
objectively obtaining and evaluating
evidence regarding assertions about
economic actions and events to ascertain
the degree of correspondence between
these assertions and established criteria
and communicating the results to interested
users.

6 - 43

Definition of Evidence
Evidence is any information used by the
auditor to determine whether the
information being audited is stated in
accordance with the established criteria

6 - 44

Learning Objective 1
Contrast audit evidence
with evidence used by
other professions.

6 - 45

Nature of Evidence

The use of evidence is

not unique to auditors.
Evidence is also used
by scientists, lawyers,
and historians.

6 - 46

Learning Objective 2
Identify the four audit evidence
decisions that are needed to
create an audit program.

6 - 47

Four Audit Evidence Decisions

1. Which audit procedures to use
2. What sample size to select for a given procedure

3. Which items to select from the population

4. When to perform the procedures

6 - 48

Audit Program
It includes a list of the audit procedures
the auditor considers necessary.

Most auditors use computers to facilitate

the preparation of audit programs.

6 - 49

Learning Objective 3
Specify the characteristics
that determine the
persuasiveness
of evidence.

6 - 50

Standard of Field Work

Sufficient competent evidential matter is to
be obtained through inspection,
observation, inquiries, and confirmations to
afford a reasonable basis for an opinion
regarding the financial statements under
audit

6 - 51

Competence
Refers to the degree to which evidence can
be considered believable or worthy of trust

6 - 52

Competence
Relevance
Independence of provider
Effectiveness of internal controls
Auditors direct knowledge

Qualifications of individuals
Degree of objectivity
Timeliness
6 - 53

Sufficiency
Sample size
Individual item tested

6 - 54

Learning Objective 4
Identify and apply the
Eight types of evidence
used in auditing.

6 - 55

Types of Audit Evidence

1. Physical examination

2. Confirmation
3. Documentation
4. Analytical procedures
5. Inquiries of the client

6. Recalculation
7. Reperformance

8. Observation
6 - 56

Information
Often Confirmed
Information

Source

Assets
Cash in bank
Accounts receivable
Notes receivable
Owned inventory out on consignment
Inventory held in public warehouses
Cash surrender value of life insurance

Bank
Customer
Maker
Consignee
Warehouse
Insurance co.
6 - 57

Information
Often Confirmed
Information

Source

Liabilities
Accounts payable
Notes payable
Advances from customers
Mortgages payable
Bonds payable

Creditor
Lender
Customer
Mortgagor
Bondholder

6 - 58

Information
Often Confirmed
Information
Owners Equity
Shares outstanding

Source

Registrar and
transfer agent

6 - 59

Information
Often Confirmed
Information
Other Information
Insurance coverage
Contingent liabilities
Bond indenture agreements
Collateral held by creditors

Source
Insurance company
Bank, lender, and
clients counsel
Bondholder
Creditor

6 - 60

Competence of Types of
Evidence

6 - 61

Types of Evidence and Four

Evidence Decisions

6 - 62

Terms and Types of Evidence

Terms

Types of Evidence

Examine

Documentation

Scan

Analytical procedures

Read

Documentation

Compute

Analytical procedures

Recompute

Reperformance

Foot

Reperformance
6 - 63

Terms and Types of Evidence

Terms

Types of Evidence

Trace

Documentation

Compare

Documentation

Count

Physical examination

Observe

Observation

Inquire

Inquiries of client

Vouch

Documentation
6 - 64

Learning Objective 5
Understand the purposes
of audit documentation.

6 - 65

Audit Documentation
Audit documentation is the principal
record of auditing procedures applied,
evidence obtained, and conslusions
reached by the auditor in the
engagement.

6 - 66

Four Purposes of Audit

Documentation
A basis for planning the audit

A record of the evidence accumulated and

the results of the tests
Data for determining the proper type of
audit report
A basis for review by supervisors and
partners
6 - 67

SYARAT KKA YANG BAIK

LENGKAP
Memuat informasi yang lengkap sehingga tidak memerlukan penjelasan
tambahan secara lisan.
TELITI
Bebas dari kesalahan pencatatan, perhitungan dan penyajian informasi.
JELAS
Mempunyai tujuan yang jelas dan mudah dimengerti pembacanya
RINGKAS
Hanya dibatasi pada hal-hal penting dan ada hubungannya dengan obyek
audit
RAPI
Diatur dengan rapi agar memudahkan penelaahan.
BERDASARKAN FAKTA DAN ARGUMENTASI LOGIS
Mencerminkan fakta yang diperoleh dari hasil audit dan informasi yang
disajikan logis bagi pembacanya.
6 - 68

PRINSIP PEMBUATAN KKA

Semua KKA harus ada tujuannya

Hindarkan pekerjaan salin menyalin
Hindarkan menulis ulang KKA
Tulis semua teknik audit yang digunakan
Tulis setiap informasi/komentar atau hal-hal
penting dalam KKA
Buktikan keterangan lisan yang diterima
Pertanyaan jangan ditinggalkan tidak terjawab.
6 - 69

PROSEDUR PENGISIAN KKA (1)

Dibuat di atas blanko yang telah disiapkan sebelumnya

Penulisan KKA supaya menggunakan satu muka saja
Pada halaman pertama sebelah kiri atas, tulislah: nama
obyek, kegiatan, lokasi dan periode yang diperiksa
Pada halaman pertama sebelah kanan atas tulis nomor
KKA, nomor langkah kerja, nama penyusun, tanggal dan
paraf, nama petugas yang mereview, tanggal dan paraf
Di bagian tengah, tulis judul dari KKA
Untuk setiap KKA yang memerlukan referensi, perlu
dituliskan nomor referensinya
6 - 70

PROSEDUR PENGISIAN KKA (2)

Setiap daftar penunjang harus dibuat pada lembar KKA

yang terpisah
Untuk setiap kegiatan yang diperiksa harus dinyatakan
teknik audit yang digunakan
Gunakan simbol-simbol audit pada KKA
Jika ada koreksi harus dinyatakan dengan jelas
Gunakan tinta yang berbeda untuk level yang berbeda

6 - 71

JENIS KKA YANG BISA DIBUAT

KKA yang merupakan

- Salinan dari data asli
- Intisari/ringkasan yang diambil dari data asli yang ditulis
- Penjelasan dari suatu keadaan tertentu atau berupa rincian
- Rekaman suatu pernyataan/keterangan lisan atau tertulis dari pihak
ketiga
- Hasil suatu teknik audit
KKA yang memuat rangkaian langkah audit
KKA yang menjembatani suatu informasi dengan data pendukung
KKA yang memuat kesimpulan umum atas beberapa hasil audit
KKA yang merupakan pernyataan tertulis dari pihak yang diperiksa
KKA yang memuat dokumentasi kelengkapan audit

6 - 72

PEMBERIAN INDEKS KKA

MANFAAT:
Memudahkan pelaksanaan review KKA baik
oleh pengawas maupun pihak lain.
Memudahkan auditor dalam meneliti kembali
KKA
Memudahkan mencari informasi pendukung
yang diperlukan dalam penyusunan laporan.

6 - 73

CARA PEMBERIAN INDEKS

SISTEM ANGKA
Tiap rincian utama diberi nomor urut angka romawi,
sedangkan rincian penunjang dengan angka arab.
SISTEM HURUF
Tiap rincian utama diberi kode urut alphabet, sedangkan
rincian penunjang dengan angka arab
SISTEM NOMOR URUT
Baik rincian utama maupun rincian penunjang diberi
nomor urut angka arab

6 - 74

Learning Objective 6
Prepare organized
audit documentation.

6 - 75

SUSUNAN BERKAS KKA

Setiap KKA yang dibuat harus dihimpun di dalam odner

Pada kulit depan di sudut kiri atas dicantumkan nama KAP yang
bersangkutan.
Pada kulit depan di sudut kanan atas ditulis tanggal aktif, tanggal tidak
aktif dan nomor berkas.
Di tengah-tengah kulit depan dan di punggung odner ditulis Kertas Kerja
audit dan nama klien yang diaudit .
Halaman pertama memuat daftar isi, di mana di sudut kanan bawahnya
ditulis nama penyusun KKA.
Halaman selanjutnya secara berurutan memuat:
1) daftar simbol audit
2) tembusan surat tugas
3) kartu penugasan
4) Jadwal dan anggaran waktu
5) berkas kelompok KKA
6 - 76

KELOMPOK BESAR BERKAS KKP

BERKAS PERMANEN (PERMANENT FILE)

Berisi informasi yang terus menerus/berulang kali
diperlukan atau pemakaiannya akan diteruskan dalam
tugas yang akan datang.

BERKAS LANCAR (CURRENT FILE)

Terutama memuat bahan informasi yang berhubungan
dengan kegiatan audit yang dilakukan sekarang dan
tidak dipertimbangkan untuk dipakai dalam tugas
berikutnya.
6 - 77

Current Files
Audit program

General information
Working trial balance
Adjusting and reclassification entries
Supporting schedules

6 - 78

Berkas Lancar

Laporan Keuangan dan Standar Kualitas

Hasil Audit
(Konsolidasi)
Laporan Keuangan Klien
Reviu Saldo Awal
Representasi Klien dan Konfirmasi
Rencana Audit
Pengujian Pengendalian dan Transaksi
Pengujian Saldo Akun dan Prosedur Analisis
Evaluasi Kelangsungan Hidup Usaha
6 - 79

Audit File Contents

and Organization
Financial
Statements and
Audit Report

Derrickson Associates
Trial Balance
12/31/2003
Cash
Accounts Receivable
Prepaid Insurance
Interest Receivable

$165,237
275,050
37,795
20,493

Working
Trial Balance
Adjusting
Journal Entries
Contingent
Liabilities

Analytical
Procedures
Test of Controls
& Substantive
TOT
Internal
Control

General
Information

Operations

Liabilities
and Equity
Assets

Audit
Programs
Permanent
Files

6 - 80

Relationship of Audit Documentation

to Financial Statements
FINANCIAL STATEMENTS
Cash
122
Acc.
.
WORKING TRIAL
BALANCE
Prelim. AIEs
Final
Cash
212
(90)
122

AIEs
Expense 90
Cash

90

6 - 81

Relationship of Audit Documentation

to Financial Statements
LEAD SCHEDULE CASH
Per G/1
Petty Cash A-2
5
Cash in Bank:
General A-3
186
Payroll A-4
21
212

AIEs

(90)
(90)

A-1
Final
5
96
21
122

6 - 82

Relationship of Audit Documentation

to Financial Statements
A-2
Cash
Count
Sheet

A-3
Bank
Reconciliation

A-3/1
Confirmation

A-3/2
O/S Check List
6 - 83

Relationship of Audit Documentation

to Financial Statements
A-4
Bank
Reconciliation

A-4/1
Confirmation

A-4/2
O/S Check List
6 - 84

Types of Supporting
Schedules
Analysis

Trial balance
Reconciliation of amounts
Tests of reasonableness

Summary of procedures
Examination of supporting documents
Informational

Outside documentation
6 - 85

Audit Documentation
Ownership of audit files
Confidentiality of audit files
Requirements for retention of
audit documentation
6 - 86

End of Chapter 7

6 - 87