Professional Documents
Culture Documents
Chapter 7
Audit Program
It includes a list of the audit procedures
the auditor considers necessary.
Sample sizes
Items to select
Timing of the tests
Persuasiveness of Evidence
Competence and sufficiency are determinants
of the persuasiveness of evidence.
Factors affecting competence include:
Relevance to audit objective
Independence of provider
Effectiveness of internal controls
Auditors direct knowledge
Qualifications of providers
Degree of objectivity
Timeliness
1.
2.
3.
4.
5.
6.
7.
Information
Source
Assets
Cash in bank (example)
Accounts receivable
Notes receivable
Owned inventory out on consignment
Inventory held in public warehouses
Cash surrender value of life insurance
Bank
Customer
Maker
Consignee
Warehouse
Insurance co.
Source
Liabilities
Accounts payable
Notes payable
Advances from customers
Mortgages payable
Bonds payable
Creditor
Lender
Customer
Mortgagor
Bondholder
Other Information
Insurance coverage
Contingent liabilities
Bond indenture agreements
Collateral held by creditors
Source
Registrar and
transfer agent
Insurance co.
Bank, lender,
and clients
legal counsel
Bondholder
Creditor
Type of Evidence
Examine
Scan
Read
Compute
Recompute
Foot
Documentation
Analytical procedures
Documentation
Analytical procedures
Reperformance
Reperformance
Type of Evidence
Trace
Documentation/
Reperformance
Documentation
Physical examination
Observation
Inquiries of client
Documentation
Compare
Count
Observe
Inquire
Vouch
Audit Documentation
Audit Documentation
Purposes of audit documentation primary
means to support that the audit was
conducted in accordance with GAAS.
Ownership of audit files
Sarbanes-Oxley Act
$165,237
275,050
37,795
20,493
Working
Trial Balance
Adjusting
Journal Entries
Contingent
Liabilities
Operations
Liabilities
and Equity
Assets
Analytical
Procedures
Test of Controls
& Substantive
TOT
Internal
Control
General
Information
Audit
Programs
Permanent
Files
Permanent Files
Current Files
Audit program
General information
Working trial balance
Adjusting and reclassification entries
Supporting schedules
AJEs
(90)
(90)
90
A-1
Final
5
96
21
122
A-3
Bank Reconciliation
A-3/2
O/S Check List
AJEs
(90)
(90)
A-1
Final
5
96
21
122
A-4
Bank Reconciliation
A-4/1
Confirmation
A-4/2
O/S Check List
Effect of E-commerce
Audit evidence is increasingly in electronic form.
Auditors must evaluate how electronic information
affects their ability to gather evidence.
Auditors use computers to read and examine
evidence.
Software programs are typically Windows-based.