81-100 Flashcards
Output control
- Batch processing
- Agree totals of output to input controls for completeness and accuracy
Types of CAATs
- Audit programs( examine client data)
- Test data (test client programs)
Assertions about classes of transactions
ACCCOP
Accuracy
Completeness
Cutoff
Classification
Occurence
Presentation
Assertions about account balances and disclosures
ACCPER
Accuracy, valuation
Completeness
Classification
Presentation
Existence
Rights and obligations
Trade receivables substantive procedures
- Agree a sum of individual customer balance to receivables in general ledger
- Agree general ledger balance to fs
- Scrutinise correspondence with customers to check any disputes
- Review aged receivables listing. Allowance is calculated according to age of receivables
- For a sample of orders, trace to GDNs, invoices
- Scrutinise board minutes on any bad debts
- If after 3 months, special provision needed
- Increase in receivables days is a bad sign
- Check year end cash receipts, absolute proof that rceivables are goos
- Scrutinise credit notes
Trade payables substantive procedures
1.Agree sum of individual supplier balance sheet to payables general ledger
2. Agree ledger balance to financial statement
3. Check correspondence with supplier and board minutes for disputes
4. Check cash book payments to supplier account to ensure cut off
5. Trace purchase order to GDN and invoice for completeness
6. Trace GDN and invoice to Purchase order for existence
7. Increased payable days is a bad sign
8. Re perform reconciliations of payables balance to supplier statement monthly for completeness . If monthly statement not given, then ask for external confirmation
Accrual and prepayments
- Compare to last year
- Post year end and pre year end to check cut off
- Analytical procedures
- Goods received, not invoiced
- Letter of representation
Main aspects of count
- Instructions gave to be given out
- Preparation of count area
- Pre number each location
- Flag after counting
- Sequentially pre numbered inventory sheets
- Count teams: one from wh and one from indpendant like audit committee
Substantive procedures of inventory
- Look at instructions and identify any shortcomings
- Observe and evaluate conduct of count
- Test counts to ensure accuracy
- Make a note of last few GRNs and GDNs for cut off
- Check all inventory sheets are recovered for completeness
- Analytical procedures over inventory record to check they reflect count results
- Obtain sufficient appropriate evidence on existence and condition of inventory
Cut off substantive procedures for purchases and sales
- Purchases: obtain GRNs from close to year end and ensure added to inventory, purchases and payables
- Sales: Obtain GDNs from close to year end and ensure removed from inventory, sales and receivables
Bank balance substantive procedures
- Write to clients bank and obtain bank certificate
- Agree balance in cashbook to financial statement figures
- Reperform bank reconciliation ( agree balances of bank statement and bank bank certificate, balances of cashbook, general ledger and statement of financial position)(agree any uncleared deposits, cheques to next month’s statement)
Cash in hand substantive procedures
- Cash counts are routinely performed to confirm completeness and accuracy
- When cash floats maintained by imprest system, check authorisation of vouchers and replenishment
