AUD - Overview of Audit Process

Question 1

List the two types of substantive audit procedures

Answer 1

1. Analytical Procedures

2. Tests of details

Question 2

List the four basic steps in the audit process

Answer 2

1. Planning
2. Internal Control Consideration
3. Substantive Audit Procedures
4. Reporting

Question 3

List the two types of test of details

Answer 3

1. Tests of ending balances

2. Tests of transactions

Question 4

What are some considerations that must be given by the auditor during the planning phase of the audit?

Answer 4

1. Determine whether to accept or continue the audit engagement.
2. Assess the risk of material misstatement
3. Evaluate the requirements for staffing and supervision
4. Prepare the required written audit program (i.e. audit plan)

Question 5

What considerations should be given by the auditor regarding internal controls prior to beginning an audit or performing substantive audit procedures?

Answer 5

1. Obtain the required understanding of the design of internal control for planning purposes
2. If contemplating on reliance on specific controls, perform tests of controls to evaluate operating effectiveness of internal control.