Audit Evidence

Question 1

What are the assertions four classes of transactions and events related disclosures for the period

Answer 1

Occurrence
Completeness
Accuracy
Cut off
Classification
Presentation

Question 2

What are these sessions for the account balances and related disclosures at period end

Answer 2

Existence
Rights and obligations
Completeness
Accuracy valuation and allocation
Classification
Presentation

Question 3

What are the procedures for obtaining audit evidence

Answer 3

It can be remembered using this:

AEIOU

Analytical procedures (ratios, changes and comparatives)

Enquiry and confirmation. For example asking the directors if they intend to sell or close down any part of the business

Inspection. For example the physical condition of inventory is a non-current assets

Observation. For example watch what stuff do in the warehouse is deliveries are received

RecalcUlation and reperformance. For example recalculate the profits recognised on the construction contract to show its accuracy

Question 4

What are analytical procedures

Answer 4

Analytical procedures are used to evaluate plausible relationships between financial and non-financial data including calculating ratios and then comparing the amounts and the ratios to:

Last year’s results
Bojesse
Industry standards

Question 5

Where can analytical procedures be applied to in regards to the stages of audit

Answer 5

Planning-this is a requirement (IAS 300 & 315)

Substantive procedures-this is optional (ISA520)

Final review – this is a requirement when forming an overall conclusion (ISA520)