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One of the largest financial services firms that has some 200 million customer accounts and does business in more than 140 countries.
Citigroup offers deposits and loans (mainly through C
Audit of Acquisition and
Tests of Controls, Substantive Tests of
Transactions, and Accounts Payable
Show those numbers to the damn auditors and I'll throw you out
the $%*@ window.-(Buddy Yates, director of WorldCom, Inc.
"To err is human, but to really foul things up you need a computer.
-Paul Ehrlich, American biologist, author, and technology commentator
A common mistake people make with trying to design
something completely foolproof
Tests of Controls and
Substantive Tests of
When is Sampling Used?
Exact information not needed
Trades effectiveness for efficiency
Uses of Sampling in Auditing
Study and evaluation of internal control
1. No. Board is to protect the shareholders; youre not in the management at all.
But if you are board member, you re more on the shareholders side. Then
you re partially biased.
a. But as an honorary position doesnt give her decision-making power.
Completing the Audit
It aint over till its over.
Yogi Berra, former catcher for the New York Yankees
Interim testing (tests
of controls and
Date of the auditors report
(audit completion date)
Management Assertions, Evidence
and Audit Procedures
Objective of Conducting an Audit of
The purpose of an audit is to provide
financial statement users with an opinion
by the auditor on whether the financial
statements are presented
THE PROBABILITY THAT
AN AUDITOR WILL
REPORT AN ERROR IN
THAT S(HE) HAS
An Emphasis on Independence-Rules of
We conducted our audits in accordance with
auditing standards generally accepted in the United
States of America. Those standards require that we
plan and perform the audit to obtain reasonable
assurance about whether the financial statements
Reports on Audited
THE TEL EV ISION IN DUSTRY DOE SNT LI KE
T O S EE T HE C OM P L E X IT Y OF T HE WORL D. I T
P R E F E R S S I M P L E R E P O RT I N G, W I T H S I M P L E
I D E A S : T H I S I S W H I T E , T H AT S B
THE AUDIT APPROACH
ACCOUNTS IN THE SALES
AND COLLECTION CYCLE
Cash in Bank
Beginning Cash receipts
Sales on Sales returns
account and allowances
Auditing the R
"Vision without action is a daydream.
Action without vision is a nightmare.
Three Main Reasons for
1. To obtain sufficient competent
2. To help keep audit costs
Internal Controls and
Control Risk Assessment
10 - 1
Definition and Importance
Control What is it?
Internal control is a management process
Internal control involves people in the organization
Single correct answers are rare; judgment is required
Only answer part b.
1. walk though you just looked at one transaction and looked through the system
a. not an example of sampling
2. attribute ensure control
a. looking for the occurrence
a. See if agrees
b. Project the total pa
BUS 310 - Intermediate Accounting I
Chapters 9, 10, 11
1. An inventory taken the morning after a large theft discloses $55,000 of goods
on hand as of March 12. The following additional data is available from the
BUS 310- Intermediate Accounting I
Chapters 2, 3 & 4
1. Know the criteria and type of transaction related to each classification as
well as the appropriate financial statement presentation.
(a) Ordinary or unusual (but not extraordina
Fraud consists of knowingly making material
misrepresentations of fact with the intent of
inducing someone to believe the falsehood and act
upon it and thus, suffer a loss or damage.
Assessing the Risk of Fraud
Assessing Risk of