Beruflich Dokumente
Kultur Dokumente
Slide 13.2
Slide 13.3
Slide 13.4
The plan part of the audit planning memorandum summarizes technical matters,client service matters and logistical matters. It expands on the strategy part and provides an overview of the client company, the industry environment, significant audit concerns, and areas of interest to the audit team. The audit program primarily focuses on substantive year-end procedures to provide guidance for the audit work in a practical way
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.5
Slide 13.6
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.7
Investments Audit Objectives & Audit Program For investments audit procedures there are three objectives:
Objective II is Investments exist and are owned by the entity. (The financial statement assertions of management are existence and ownership).
Procedure Number 3 (from Objective II) is agree to authorization in the minutes of the Board of Directors
Local this year bought controlling interest in Newco, Design Information Planning and Programming Resources (DIPPER), Financial Investment National Enterprises (FINE) and 15 per cent of Zap. Check the minutes of the board of directors to see if the board of directors authorized the purchases.
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.8
Objective II Oohh-Oh
Ask management for purchase agreements for Newco, DIPPER and FINE. The team traces the purchase amounts to the bank statement to verify the amount and payment. Review a due diligence report for the purchase of FINE. One purchase agreement shows Sister Information Systems (SIS), not Local (who was thought to be the owner), has entered into a share purchase agreement to purchase all shares of Newco. A discussion with management indicates that Newco is owned by SIS, which is owned by Brother, which is supposedly owned by Local. There is no documentation supporting ownership of Brother by Local. Send a confirmation letter to Newco to determine ownership.
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.9
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.10
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.11
4 Trade accounts receivable represent uncollected sales or other charges to bona fide customers and are owned by the entity. (Existence and ownership.) 5 All cash collections are accurately recorded. (Completeness and accuracy.) 7 Valuation of trade receivables is appropriate (i.e., provision is made for uncollectable amounts). (Valuation, presentation and disclosures.)
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.12
Slide 13.13
Slide 13.14
Slide 13.15
1. Inventory is accurately compiled and priced in conformity with acceptable methods (e.g., FIFO, LIFO) consistently applied. (Accuracy.)
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.16
Slide 13.17
Slide 13.18
Obsolete Inventory
To review if inventory is obsolete you talk to management and see if they have any products or product lines they plan to cancel in the future. You also take a look at the sales budget to see what products sales are based on. You look at inventory turnover on a historical basis and determine that the product management intends to cancel is a very slowmoving product and should have increased allowances for obsolescence.
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.19
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.20
Slide 13.21
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.22
The first item in the completion memorandum is the statement that the engagement manager and partner have reviewed the audit papers related to critical areas. The other important elements to discuss immediately are audit schedules, going concern considerations and your overall opinion on the work.
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.23
Critical Areas are those to do with risk and significant concerns. Accounting issues are broadly defined. Other topics described in the completion memorandum are foreign exchange, pension plan and postretirement benefits. Other matters are a round-up of miscellaneous matters including illegal and questionable acts, management letter, summary of unadjusted audit differences and the status of statutory financial statements.
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007
Slide 13.24
Any Questions?
[Hayes, Dassen, Schilder and Wallage, Principles of Auditing An Introduction to ISAs, edition 2.1] Pearson Education Limited 2007