Audit procedures

Question 1

Going concern

Answer 1

1.Monitor cash flow
2. Obtain written rep for feasibility of future plans
3. Review bank correspondence in case of overdraft

Question 2

Revenue

Answer 2

Calc movement in revenue and GPM

Trace GDN to revenue account to check period

Test system

Question 3

Provision

Answer 3

Discuss basis of assumption of provision

Legal correspondence/similar cases

Written rep on completeness/valuation

Make sure to give as % to revenue (show its material)

Question 4

NCA

Answer 4

Obtain breakdown of additions/disposal and agree to invoices

Obtain schedule/recalc figure

Completeness- floor to sheet

Existence- sheet to floor

Question 5

Receivables

Answer 5

Confirm balance with customers

Calc rec days

Agree sample to invoices/GDN to confirm completeness

Question 6

Payables

Answer 6

Direct confirmation from supplier

Inspect correspondence for overdue payments

Inspect contracts for changes to credit terms

Question 7

Inventory

Answer 7

Obtain count instructions and attend stock count

Enquire about slow moving inventory/damaged (review aged inventory analysis)

Question 8

Payroll

Answer 8

Obtain reasons for amount

Review board minutes for discussion on pay

Data analytics on payroll costs for outliers

Reperform bonus calc