audit procedures

Question 1

audit evidence must be

Answer 1

sufficient
relevant
reliable

Question 2

problems

Answer 2

“discuss with management” doesn’t score marks
“dont use standard audit procedures like cast or add up”

write how and why
dig deep in scenario
refer to FS assertions if relevant eg. if related to accuracy of a number

Question 2

a good audit procedure

Answer 2

start with fact
refer to audit evidence (ideally 3rd party)
explain fully how the test works

Question 3

75 ppl from staff were told they will be made redundant in 6 months

they will be given 10% of their salary as a redundancy payment

Answer 3

-obtain redundancy note, to ensure redundancy notice is before year end - past event - provision required
-75 staff- review board minutes to ensure that this is full list and ensure this programme is authorised by board, no authorisation means not confirm
-get written representations from management to confirm they are committed to this program

-obtain individual letters sent to staff, confirm payout details are 10%, 100% and these are used in inputs

-recalculate to ensure arithmetical accuracy

-confirm staff’s years and details from HR records to confirm inputs are accurate