CACC521-Week02-text

CACC521-Week02-text - CACC 521 24/09/2010 19:29:00 Class...

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Unformatted text preview: CACC 521 24/09/2010 19:29:00 Class discussion and report due in week 4 for my group. ← ← describe other types of audits ← ← largely focused on external auditing ← accountants regulation ← ← Chapter 2 continuation ← ← GAAS – benchmark quality of audits ← recognize when gaas is ← ← Interpret unqualified audit report – critique, what is missing ← evaluating evidence ← Quality control standards ← know differences between audits – different assurance levels ← asked if audit, review or compilation is required • find reasons ← Chapter 3 – LO12 • not asked to write report • know core knowledge – subtle differences in unqualified report, know differences ← Review ← 1. procedures – • the steps in performing the audit • various sections of an audit – revenue, A/R, A/P, etc. • every major asset class has a procedure • gather evidence ← standards • measure the quality of the audit • how the auditor performs the audit • less subject to change • minimum requirements ← GAAS standards are the same in all environments however procedures will change depending on whether the company is computerized or manual system. ← ← 2. Due professional care • what a prudent person would due • would you have confirmed more accounts if you found some fictitious accounts • reasonable judgement • may be responsible to find fraud • Follow GAAS • if fraud is found after audit, questions about whether audit was thorough enough ← ← 3. ← Programming independence • ← Investigative independence • no personal bias should impact gathering of evidence ← Reporting • no pressure from management ← ← Threats to independence • self interest – own stock • self review – auditing your own work • advocacy – advocate client’s position • intimidation – threatened by someone to provide positive audit • familiarity – served as board director ← ← 4. 3 elements of planning and supervision considered essential • audit program - document procedures o by AR, AP, etc. • understanding the entity – required to know the business o know how they transact business • documentation o conclusions reached o disagreements ← 5. Timing • Need time to plan the audit without undue pressure or intimidation o can’t accept the audit if not enough resources ← ← 6. understanding of internal controls • nature, timing and extent of audit procedures o nature – high risk clients more evidence o timing – before year end, after year end o extent – sufficient evidence • have to do substantive testing but don’t have to test controls • DR = AR/IR x CR ← ← 7. Audit Evidence • contracts • check copies • bank reconciliations • invoices • shipping •...
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This note was uploaded on 04/14/2011 for the course ACC 521 taught by Professor G.caers during the Spring '11 term at Ryerson.

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CACC521-Week02-text - CACC 521 24/09/2010 19:29:00 Class...

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