Assignment 7-1 Audit Plan Procedures

Assignment 7-1 Audit Plan Procedures - environment,...

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Assignment 7-1 Audit Plan Procedures Chapter 3 3-6. List the matters an auditor should consider when developing an audit plan. According to the text, in the audit plan, the auditor documents a description of the nature, timing, and extent of the planned audit procedures to be used in order to comply with auditing standards. Basically the audit plan should consider how to conduct the audit in an effective and efficient manner. Additional steps that should be performed include: - Assess business risks - establish materiality - consider multilocations - Assess the need for specialists - Assess the possibility of illegal acts - Identify related parties - Consider additional value-added services 3-10. What are the three general types of audit tests? Define each type of audit test and give two examples. Three types of general audit tests are: - Risk assessment procedures – are used to obtain an understanding of the entity and its
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Unformatted text preview: environment, including its internal control. Examples include(1) inquires of management and others and (2) observation and inspection.-Tests of control-are audit procedures performed to test the operating effectiveness of controls in preventing, or detecting and correcting, material misstatements at the relevant assertion level. Examples include (1) observation of the application of specific controls and (2) inspection of documents, reports and electronic files.-Substantive procedures- are designed to detect material misstatements in a transaction class, account balance, and disclosure component of the financial statements. There are two categories of substantive procedures: (1) tests of details and (2) substantive analytical procedures. An example of each are (1) Tests of details on account balances and (2) examination of trends and ratios....
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 470 taught by Professor Kwong during the Spring '11 term at Franklin.

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