Adv Internal auditing summary 5

Adv Internal auditing summary 5 - Small entities Use...

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Unformatted text preview: Small entities:- Use substantive audit strategy (specific item or representative sample tests) or combined approach o Use CAATS when possible o Analytical procedures imp (evaluating financial info techniques)- With materiality, consider user needs (what’s important to them)- Engagement risk o Who are the owners, mgt integrity, previous exp. with client o Set control risk at max- Audit risk model applies: o Inherent & control risk often assessed as high for most areas NFPOs:- No transferable ownership interest o NFP purpose, no financial return to resource providers- With capital assets o Record (carry) at cost if purchased or at FV is contributed (at date of contribution) o Amortize; write down when required o Exemption for small NFPOs Gross revenues of $5k or less in 2 consecutive yrs Write off as capital assets as expenses o Collections excluded o Retroactive application if not applied previously- Contributions o Entity has mostly contributions, donations, some sales Donations can be restricted • There’s obligation to follow donor’s wish or you pay it back • Do deferred match: DB cash, CR deferred contributions Or unrestricted (do whatever you want) • Brought into revenue o revenue recognition is by 2 methods: deferral method: (with or without fund accounting)...
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This note was uploaded on 03/02/2012 for the course ACC 821 taught by Professor Caplan during the Spring '12 term at Ryerson.

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Adv Internal auditing summary 5 - Small entities Use...

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