- This topic has 1 reply, 2 voices, and was last updated 11 years ago by
.
- Posts
Question 1
10 Records in the fixed asset register are inspected to verify that they were physically inspected within the last 12 months.
-Why this is a test of control?
-‘physically inspected’ means that the company had perform a stock count before the year end?Question 4
An internal control system is found not to be operating effectively
-Can i perform less substantive test if the system is strong and i choose to undertake controls-based audit approach instead of risks-based approach?Question 7
What are the preconditions of an audit?!
– What is the difference between audit procedure before accepting an audit and preconditions of an audit?* I apologize if that’s too much to ask and please forgive my English.
Q1: the auditor is not inspecting the assets, but is inspecting the fixed asset register to ensure that these show that the company had physically verified the assets. The control is that the company inspects the assets; the ToC is that the auditor ensures that this is done.
Q4 A controls based approach is also a risk based approach: there is a risk that the controls do not trap errors. If IC is not strong, the auditor must do more substantive tests; if IC is good, less substantive testing is needed.
Q7: preconditions are:
(a) There is an acceptable financial accountant reporting framework.
(b) The directors accept the premise of an audit eg that auditors are entitles to full explanation and disclosure of documents.
- You must be logged in to reply to this topic.