DRAFT OF PROCEDURES AND FIELD WORKFinal Project Part OneDraft of Procedures and Field WorkSouthern New Hampshire University1
DRAFT OF PROCEDURES AND FIELD WORKOverviewAn audit process refers to a set of actions and procedures put in place to review acompany’s activities, to identify inefficiencies, reduce costs, and thus help the organization meetits objectives. The main objective of an auditing process is to ensure that the company’s reportsare accurate and comply with necessary regulations and policies. The following analysis isfocuses on how an audit process in will be conducted in Amazon.com.Inc, the right proceduresrequired to review high-risk transactions for cash and revenue, and a test to assess appropriateassertions for designated high-risk business transactions. Analytical procedures refer to evidence applied in an audit, to identify possible problemsthat the company’s financial records may have, creating room for a thorough investigation.Analytical procedures include comparing sets of financial and operational information todetermine if historical relationships continue in the period being reviewed (Bragg S. 2019). Incorporating analytical procedures in planning. The planning stage will involve an understanding of Amazon’s business and the retailindustry, an assessment of the various business risks that Amazon is prone to, preliminaryanalytical procedures such as comparing the client’s ratios to industry ratios, definition of theobjective of analytical procedures to be carried out and their timing, select suitable analyticalprocedures and calculate common financial ratios. Analytical procedures at this stage of the auditare on temporary financial records, the company’s budget, and available management reports.Through the analytical procedures carried out, major risk areas will be determined, and review ofnon-financial information such as analyzing the company’s employment trends. Performance of test controls and substantive test of transactions At this stage of the audit, tests of control will involve testing processes and proceduresused by Amazon staff to ensure that necessary controls such as authorizations, duty segregationand performance review are put in place and effectively used. Thus, performance, observationand inspection tests will be carried out (Bragg S. 2018). For example, testing to determine if thefinance director authorized payroll summary prior to payment, usually evidenced by a signature.If test controls are weak, substantive tests will be performed, looking out for likely misstatements2
DRAFT OF PROCEDURES AND FIELD WORKin the financial records. For example, crosschecking a sample of paid employees and matchingtheir salaries on the pays lip to bank statements.