ACT 4497 Lecture ch06

ACT 4497 Lecture ch06 - Assurance Services and the...

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Unformatted text preview: Assurance Services and the Integrity of th Modern Auditing: Modern Auditing: Financial Reporting, 8 Edition California Polytechnic State University at San Luis Obispo William C. Boynton Portland State University Raymond N. Johnson Chapter 6 – Audit Evidence Chapter 6 Overview Chapter 6 Overview Audit Evidence Defined Audit Evidence Defined • Audit Evidence – Accounting records – Corroborating information • Accounting Records • Other Information Assertions and Specific Audit Objectives Assertions and Specific Audit Objectives • Five Management Assertions (GAAS) – Existence and Occurrence – Completeness – Rights and Obligations – Valuation or Allocation – Presentation and Disclosure Assertions and Specific Audit Objectives Assertions and Specific Audit Objectives • Transaction Class Audit Objectives – Occurrence – Completeness – Accuracy – Cutoff – Classification Assertions and Specific Audit Objectives Assertions and Specific Audit Objectives • Account Balance Audit Objectives – Existence – Completeness – Rights and Obligations – Valuation and Allocation Assertions and Specific Audit Objectives Assertions and Specific Audit Objectives • Disclosure Audit Objectives – Occurrence and Rights and Obligations – Completeness – Understandability – Accuracy and Valuation Sufficiency of Audit Evidence Sufficiency of Audit Evidence • Materiality • Risk of Material Misstatement • Size of Population • Characteristics of Population Sufficiency of Audit Evidence Sufficiency of Audit Evidence Competency of Evidence Competency of Evidence • Relevance of Audit Evidence • Reliability of Audit Evidence • Professional Judgment Reliability of Audit Evidence Reliability of Audit Evidence Reliability of Documentary Evidence Reliability of Documentary Evidence Objectives of Audit Procedures Objectives of Audit Procedures • Obtain an understanding of the entity and its environment • Test operating effectiveness of controls • Support assertion or detect material misstatements Types of Audit Procedures Types of Audit Procedures • Inspection of Documents or Records – Vouching – Tracing Types of Audit Procedures Types of Audit Procedures • Inspection of Tangible Assets • Observation • Inquiry • Confirmation Types of Audit Procedures Types of Audit Procedures • Recalculation • Reperformance • Analytical Procedures • Computer­Assisted Audit Techniques Four Decisions About Audit Procedures Four Decisions About Audit Procedures • Staffing and Supervising the Audit • Nature of Audit Procedures • Timing of Audit Procedures • Extent of Audit Procedures Documenting Audit Decisions and Audit Documenting Audit Decisions and Audit Evidence • Audit Program – Recommended by GAAS – Documents decisions • Working Papers – Documents audit decisions – Documents audit evidence obtained Types of Working Papers Types of Working Papers • Working Trial Balance • Schedules and Analyses • Audit Memoranda and Corroborating Information • Adjusting and Reclassifying Entries Preparing Working Papers Preparing Working Papers • Heading • Index Number • Cross­Referencing • Tick Marks • Signatures and Dates Working Paper Example Working Paper Example Reviewing Working Papers Reviewing Working Papers • Scope of Work Performed • Evidence and Findings Obtained • Audit Judgment Exercised • Conclusions Reached by the Auditor Working Paper Files Working Paper Files • Permanent File • Current File • Ownership and Custody ...
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This note was uploaded on 02/07/2011 for the course ACT 4497 taught by Professor Lewis during the Spring '11 term at Troy.

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