Chapter_Seven - Auditing Lecture NotesChapter Seven Audit...

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Auditing Lecture Notes- Chapter Seven Audit Evidence Opening Vignette Discussion- Just because numbers tie in and are mathematically correct does not mean you have sufficient audit evidence. Outside factors, such as current market value also must be considered. As an auditor, looking for evidence to support the numbers in the financial statement. Evidence- information auditors use to determine if financial statements follow GAAP Evidence is what you use to determine if you are going by GAAP. Four Evidence Decisions the auditor must learn to make: 1) Audit procedures – which ones to use, what type of audit procedure to use. Ex.) confirm A/R balance, observe inventory, what type to use? 2) Sample size for a given procedure – the sample size for any give procedure will vary from audit to audit. Each engagement will have their own 3) Items to select from the population – will you select by: time period? (month, quarter), will you select by dollar amount? ( anything above 5000 dollars is considered material, so anything above that we will perform a procedure on it) Randomly? (every 5 th one). For accounts receivable use a combination. 4) Timing – interim testing vs. year end testing. Audit Procedure – the detailed instruction for the collection of a type of audit evidence that is to be obtained at some point during the audit i.e. the step used to obtain the audit evidence * They should be considered separately. Cash should be considered separately from inventory, fixed assets and payables. They are in depended of each other when you are trying to put together the audit. *Audit procedures will be different from audit to audit. Steps of audit procedures will be different. Audit Program
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This note was uploaded on 11/23/2009 for the course ACCT 411 taught by Professor Jackson during the Fall '09 term at Michigan State University.

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Chapter_Seven - Auditing Lecture NotesChapter Seven Audit...

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