Chapter 13 – Overall Audit Plan and Audit Program

Olga Quintana

Informations

• Publié par: Phyan
• Nombre de lectures: 299
• Langue: English

Extrait

Overall Audit Plan
and Audit Program
Chapter 13
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 1Learning Objective 1
Use the five types of audit tests
to determine whether financial
statements are fairly stated.
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 2Types of Tests
 Risk assessment procedures
 Further audit procedures
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 3Further Audit Procedures
and the Audit Risk Model
Audit risk AAR
= PDRmodel IR × CR
SufficientSubstantive Tests ofTests of Analytical competenttests of details of+ + + =controls procedures evidence
transactions balances per GASS
Further audit procedures
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 4Risk Assessment Procedures
A major part of these procedures are
done to obtain an understanding
of internal control.
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 5Role of All Audit Tests in the
Sales and Collection Cycle
Accounts Cash in
Sales Receivable Bank
Sales Cash receipts
transactions transactions
Audited by Audited by
TOC, STOT, and AP TOC, STOT, and AP
Ending Ending
balance balance
Audited by AP and TDB
TOC + STOT + AP + TDB
= Sufficient appropriate evidence per GAAS
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 6Learning Objective 2
Select the appropriate types
of audit tests.
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 7Relationship Between Further Audit
Procedures and Evidence
Type of Evidence
Further Audit Procedures
Tests of controls  
Substantive tests of transactions 
Analytical procedures
Tests of details of balances   
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 8
Physical
examination
Confirmation
Documentation
ObservationRelationship Between Further Audit
Procedures and Evidence
Type of Evidence
Further Audit Procedures
Tests of controls  
Substantive tests of transactions   
Analytical procedures  
Tests of details of balances   
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 9
Inquiries of
the Client
Reperformance
Analytical
Procedures
RecalculationAudit Assurance at Different Levels
of Internal Control Effectiveness
CAcceptable 3
assurance
Audit assurance
from control riskC2 assessment and
tests of control
C1
Audit assurance
from substantive
testsNo
assurance
A C B
INTERNAL CONTROL EFFECTIVENESS
Weak control Strong control
Reliance on controls: C – None, C – Some, C – Maximum3 2 1
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 10
AUDIT ASSURANCE