Audit approach: Procedures Flashcards
What are the 5 evidence collection techniques?
AEIOU
Analytical procedures
Enquire
Inspect
Observe
RecalcUlate
What are the Pros of using Analytical Procedures as an evidence collection technique?
> Can perform even if documents are not available
Efficient as doesn’t require detailed tests of lots of items
What are the Cons of using Analytical Procedures as an evidence collection technique?
> Limited by any weakness in the underlying accounting system
What are the Pros of using Enquiry as an evidence collection technique?
> May be only way to audit judgmental issues
(backed up by WR)
What are the Cons of using Enquiry as an evidence collection technique?
> Weakest form of evidence
What are the Pros of using Inspection as an evidence collection technique?
> 3rd party documents are always strong evidence
What are the Cons of using Inspection as an evidence collection technique?
> Internal documents may be manipulated
What are the Pros of using Observation as an evidence collection technique?
> Good for inventory counts
What are the Cons of using Observation as an evidence collection technique?
> Only gives evidence that the procedure is being performed correctly when auditor is watching
What are the Pros of using Recalculation as an evidence collection technique?
> Auditor created evidence is a strong form of evidence
What are the Cons of using Recalculation as an evidence collection technique?
> Can be time consuming
What are 3 points that addresses the procedures in an audit approach?
> Auditor needs to collect sufficient and appropriate evidence
Sample sizes will need to be increased if ROMM or error is greater than expected
Appropriate evidence should be reliable and relevant / relate to FS
(see assertions)
What are the assertions that relate to the Balances (SOFP)
CARVE
ISA 315 para A124
Completeness
Rights & Obligations
Accuracy
Valuation
Existence
Presentation & Disclosure
What are the assertions that relate to the transactions (SPL)
COCCA
ISA 315 para A124
Completeness
Occurrence
Classification
Cut-Off
Accuracy
Presentation & Disclosure
