Introduction to Auditing Individual Areas

Question 1

Identify the 4 assertions for account balances at the end of the period.

Answer 1

Existence;
Completeness;
Rights and obligations; and
Valuation and allocation.

Question 2

Identify several substantive procedures usually performed in every audit area.

Answer 2

Agree financial statement elements, or trial balance from which financial statement elements are derived, to underlying accounting records (general ledger); Scan the entity’s journals and ledgers for any “unusual” items; Make inquiries of management and other personnel; document inquiries and management’s responses in the management representations letter; and Perform specific analytical procedures - consider historical trends and events within the industry.