AUDIT PROCEDURES

I have seen many fellow students asking some questions on assertions and audit procedures.You may kindly visit the ACCA website and read the technical article on assertions and audit procedures .it has a great technique which may add great substance to your open tuition lectures and lecture notes.What I have learnt on this area is the 3 step technique when dealing with assertion,risk and audit procedures.

1.choose the assertion that will tested in the given scenario
2.identify the risk that will cause material misstatements .after testing the assertion you should be able to identify these e.g net realizable value is less than the cost thus inventory is overstated in current assets .valuation should be tested in step one in order to obtain evidence about this risk of material misstatement
3.now audit procedures should be performed in order to avoid the risk e.g recalculation,inspection of tangible assets ,etc.When writing an audit procedures it must be in the form of 1.audit procedure
2.reason for the procedure
3.and assertion

E.g Tracing post end sales to purchase invoices to ascertain that the net realizable value of inventory is not less than the cost of inventory.This confirms the appropriate VALUATION of inventory under assets.

Sir, if I got anything wrong in my understanding of this article and application of principles please correct me.I just thought it would be a valuable discussion as many questions have been asked on this area by fellow students .