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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 12 – Audit Procedures in Response to Assessed Risks: Substantive Tests Steps for Assessing the Risk of Material Steps for Assessing the Risk of Material Misstatement Determining Detection Risk Determining Detection Risk
• Detection Risk Model • If, AR = IR x CR x DR, and • DR = AP x TD so, • DR = AR / (IR x CR) Preliminary Audit Strategy, Planned Detection Risk, Preliminary Audit Strategy, Planned Detection Risk, and Planned Emphasis on Audit Tests Tests of Controls and Substantive Tests Tests of Controls and Substantive Tests Using IT to Support Substantive Tests Using IT to Support Substantive Tests
• Generalized Audit Software • Reconcile Detail Audit Data with the General Ledger • Selecting and Printing Audit Samples • Testing Calculations and Making Computations • Testing the Entire Population • Summarizing Data and Performing Analyses Audit Choices in the Design of Audit Choices in the Design of Substantive Tests
• Nature • Timing • Extent • Staffing Nature of Substantive Tests Nature of Substantive Tests Timing of Substantive Tests Timing of Substantive Tests
• Prior to Balance Sheet Date
– Interim Date Risks – Importance of Internal Controls • At the Balance Sheet Date – Comparison of Account Balances – Investigate Unusual Amounts – Other Analytical Procedures Extent of Substantive Tests Extent of Substantive Tests Summary of Relationships Summary of Relationships Special Considerations Special Considerations
• Balance Sheet and Income Statement Accounts • Related Party Transactions General Framework for Developing an Audit General Framework for Developing an Audit Program for Substantive Tests • Nature of Procedures to be Performed
– Outline of the work to be done – Basis for coordinating, supervising, and controlling the audit – A record of the work performed • Addressing All Assertions Audit Program Example Audit Program Example Audit Objectives Example Audit Objectives Example ...
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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.
- Spring '11