4. evidence and reporting Flashcards
what are the 2 types of tests that auditors carry out - to gather evidence
- tests of controls
- substantive procedures
what are tests of control
evaluate the effectiveness of controls at detecting, prevent material mistatements
what are substantive procedures
procedures designed to detect material mistatement
what are the 2 types of susbstantive procedures
- tests of details (testing numbers)
- substantive analytical procedures (comparisons)
if the controls are strong then…
auditor can reduce level of substantive testing
what makes evidence more reliable
external > internal
written > oral
og > copies
auditor generated > client
what are the different ways that an auditor can gather evidence
LETTERS
AIRCORE
what are the different ways that an auditor can gather evidence
AIRCORE
Analytical procedures
inspection
recalculation
confirmation
observation
reperformance
enquiry
what is FS assertion
and what does auditor do about it
statements of fact made by directors that are in the FS
auditors need to gather evidence that proves the assertions
SPL Assertions
LETTERS
CCCOAP
SOFP assertions
LETTERS
CCPERV
SPL assertions
CCCOAP
Completeness - nothing missing
Classification - recorded in proper accounts
Cut-off - recorded in correct year end period
Occurence - overstating
Accuracy - number correct
Presentation
SOFP assertions
CCPERV
completeness - nothing missing
classification
presentation
existence - overstatement
rights and obligations - they own it
valuation -
what goes into an audit report - how is it laid out
title
auditors opinion
basis for opinion
going concerns conclusion
audit approach
materiality
companies act
auditor required to report on by exception
what are the 3 things that MUST be stated in audit report
- FS prepared in accordance with the companies act
- FS prepared in accordance with relevant financial reporting framework
- info in directors report is consistent with the FS
what are the things that are reported by EXCEPTION in the audit report
LETTERS
RAPID
RAPID
what are the things that are reported by EXCEPTION in the audit report
Returns
Accounting records
Proper
Information received
Directors pay correctly disclosed
