Tests to verify the existence ownership and valuation

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tests to verify the existence, ownership and valuation of the underlying  accounts Linking audit procedures to control deficiencies When fraud risk is high: Consider assigning more experienced staff to the team Decrease predictability of procedures Linking procedures to fraud risk factors Evaluate audit evidence
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Auditing for fraud  15:19 Increase skepticism when There are discrepancies ( )  in the accounting records;  transaction not recorded in a timely fashion The auditor finds conflicting or missing evidence The relationship with management is strained ( ) Be alert as to unusual amounts of revenue being recorded at year end Exercise judgment and follow up Communicate existence of fraud Communicated to the level at which effective action can be taken to  ensure that the fraud will be dealt with Financial statement fraud Determine that the financials have been corrected Communicate existence of fraud to management Issue a qualified or adverse opinion if not corrected   Documentation The engagement team’s planning discussion regarding the entity ‘s  susceptibility to material misstatement due to fraud, including how and  when the discussion occurred, the audit team members who  participated, and the subject matter discussed The audit procedures performed to assess the risks of material  misstatement due to fraud Specific fraud risks that were identities and a description of auditor  responses to those risks  Reasons supporting the auditor’s conclusion that risks associated with  revenue recognition are not a concern on the particular engagement The results of the procedures to identify potential management override  of controls Other conditions or analytical relationships that may have led the  auditor to believe that additional procedures were necessary, and the  auditor’s responses in addressing those issues  Any communications regarding fraud made to management, those  charged with corporate governance and /or regulations
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Auditing revenue and related accounts  15:19 Overview of the revenue cycle Convenient framework for viewing the interrelationship between accounts that  are affected by the same transaction or business activity The revenue accounting system and related controls Auditor must consider the nature of the document (electronic or paper) o Receive a customer purchase order Sales order is the basis for determining that all transactions are  properly authorized and completely recorded o Check inventory stock status
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