Class_10v2_web

Class_10v2_web - Learning Objectives 1 2 Audit evidence in...

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AFM 451 1 1. Content and purpose of audit programs. 2. Audit working papers for proper form and content 1. Audit evidence in terms of its appropriateness and relative strength of persuasiveness. 2. Techniques for gathering evidence. Learning Objectives Learning Objectives
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AFM 451 2 Audit Risk and Audit Risk and Sufficiency of Evidence Sufficiency of Evidence In order to reduce detection risk (and thereby audit risk) more evidence is required to support an opinion. In order to reduce audit risk, only detection risk can be affected by the auditor, so more evidence is required to support an opinion.
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AFM 451 3 Four evidence decisions Four evidence decisions NATURE : Which audit procedures to use EXTENT : What sample size to select for a given procedure SELECTION : Which particular items to select from the population TIMING : When to perform the procedures
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AFM 451 4 1. NATURE: Which audit 1. NATURE: Which audit procedures to use procedures to use What is an audit procedure? The detailed instruction for the collection of a type of audit evidence The actual task that you do to obtain evidence with respect to an audit objective, for example: Count inventory - what is the: quantity, location, tag number, unit of measure and condition of inventory
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AFM 451 5 2. EXTENT: What sample size to 2. EXTENT: What sample size to select for a given procedure select for a given procedure The sample size will vary depending upon The sampling method chosen The type of test (e.g. test of controls vs. test of details) The amount of assurance to be obtained from the test Professional judgment and firm procedures help in deciding sample size
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AFM 451 6 3. SELECTION: Which particular items 3. SELECTION: Which particular items to select from the population to select from the population Once the sampling method has been determined and the sample size will be identified Then, we can actually choose the item. Method of selection will depend upon sampling method, e.g. interval sample, high dollar items, random sample, etc.
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7 4. TIMING: When to perform the 4. TIMING: When to perform the procedures procedures When are we likely to conduct tests of controls? What about tests of details?
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Class_10v2_web - Learning Objectives 1 2 Audit evidence in...

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