3air_im04 - 66 CHAPTER 4 Audit Objectives, Procedures, and...

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66 CHAPTER 4 Audit Objectives, Procedures, and Working Papers LEARNING OBJECTIVES Review Checkpoints Exercises and Problems Cases 1. List and describe the activities auditors undertake before beginning an audit. 1, 2, 3, 4, 5 36, 37 21, 22, 48, 49 2. Identify the procedures and sources of information auditors can use to obtain knowledge of a client's business and industry. 2, 6, 7 38 22, 49 3. Name the principal accounts in each cycle in accounting and business processes. 8 23 4. Describe and define the five principal management assertions in financial statements, and explain their role for establishing audit objectives. 9, 10 39, 40 5. Explain audit evidence in terms of its competence and relative strength of persuasiveness. 11, 12 41, 42, 43 6. List and describe seven general types of audit procedures for gathering evidence. 13, 14, 15, 16 44, 45, 46 50 7. Discuss the effectiveness of various audit procedures. 16, 17, 18 51 8. Review an audit working paper for proper form and content. 19, 20 POWERPOINT SLIDES PowerPoint slides are included on the website. Please take special note of: * Reference List * Audit Planning * Assertions * General Audit Procedures * Objective of Working Papers THREE PHASES OF AN AUDIT: Location of Topics in Remaining Chapters of Textbook This table shows the chapters where various planning, performance, and completion
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67 field work topics appear. For example, "knowledge of the business" is introduced in Chapter 4, its importance is seen in Chapter 6 (Control Risk Assessment) and Chapter 8 (Computer Audit), and it is highly relevant in the applications casettes in Chapters 9, 10, 11, and 12. Audit Field Work (1) (2) (3) Sample,Test Computer Applications (4) Chapter. ........................ 4 5 6 7 20 8 19 9 10 11 12 13 PHASE I--PLAN THE AUDIT: Accept/retain audit clients X Pred/successor auditors X Engagement letter X Assign the audit team X Use of specialists X Obtain knowledge of business X X X X X X X First-time audits X Obtain financial statements X Assertions,objectives X X X X X Characteristics of evidence X General audit procedures X X Specific audit procedures X X X X Working papers X Identify potential errors X X X X (prelim analytical procedures) X Determine planning materiality X X X Assess various audit risks X X X X X X X X X X Evaluate internal control X X X X X X X X Prepare audit program X X X X X X X X X PHASE II--PERFORM AUDIT PROCEDURES: Tests of controls X X X X X X X X X Substantive tests of balances X X X X X X X X PHASE III--COMPLETE THE AUDIT AND PREPARE THE REPORT: Evaluate audit evidence X X X X X X X Test for subsequent events X Obtain attorney and management representations X Review financial statements X Adjust the accounts X Prepare the audit report X (1) Chapter 4: Audit Objectives. Procedures, and Working Papers; (2) Chapter 5: Audit Planning With Analytical Procedures, Risk, and Materiality; (3) Chapter 6:
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This note was uploaded on 02/08/2012 for the course IAF IAF520 taught by Professor Aldcorn during the Winter '08 term at Seneca.

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3air_im04 - 66 CHAPTER 4 Audit Objectives, Procedures, and...

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