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Hi sir.
Do you have any technique in answering questions on audit procedures?
I have been trying to memorise the audit procedures and of course I ended up forgetting most of it and I am not familiar with what kind of documents that are available. In my past few sittings, whenever I see questions on audit procedures, I tend to leave that part empty…
Then that’s probably the reason that you’re still on this site!
How can you possibly say “…..I tend to leave that part empty”. I’m SPEECHLESS!
“Audit procedures” is asking you how you would verify the accounting assertions about various matters.
They start wih a verb – its an action that an auditor is going to follow
So:
“Confirm that …., verify that ….., inspect ….., discuss….., ascertain ……, evaluate …., determine ….., calculate ……, obtain ……., reperform …….., trace ……, follow through …….., discover ……., compare …….., analyse ………, ” would all be appropriate words to start an audit procedure. They are all active verbs, “doing” words as my children used to call them
Is that better for you?
Sir verify is appropriate?
It is like that we ask examinor to verify rather we as ( auditor)…
Please correct me if I am wrong…
Whether it is possible to use inspect instead verify?For the verb, I think I have no problem with that…but for the subject matter or the accounting assertions to be verified, I have a big problem with that…
And, I told my friend regarding this problem, she said just review the board minutes. But, I have no idea what are the matters that are being discussed in a board meeting.
Soooraj, verification does not always involve inspection so, no, the words are not interchangeable
The expression “audit procedures” simply means “What tasks would you undertake to confirm that …….” or “How can you find out whether the proposed treatment …..”
This is common sense!
How could you find out where I went on holiday last year? What procedures could you adopt to find out that information?
Don’t need to fly to get to my holiday destinations!
What about simply “Ask the directors where holidays were taken” or, specifically for the example given, what about “Ask Mike where he went on holiday”
THEN you can start verifying by inspecting flight tickets, hotel receipts, train tickets, bank transactions
i see…
sir, what about the following audit procedures for june 2008 q3(b)(ii), in relation to related party?
– Obtain written representation from management detailing the exact nature of peter Sheffield control over jarvis co.
– Obtain written confirmation from jarvis co’s management disclosing the exact nature if relationship with pulp co’s chairman, which should be the same as disclosed by the management.
is it appropriate to request written confirmation from the other party that our audit client has relationship with?
You would be very lucky to get a response – there’s no obligation on the other party to respond
Your second point must therefore be “Request written representation ….” rather than “Obtain ….”
In fact, “written representations” in your first point will not be enough to get total satisfaction. You’ll need more than this.
“Conduct a search at Companies House” could help you establish the extent of Sheffield’s interest
“Obtain a copy of Jarvis Co financial statements to discover Jarvis’ disclosure of related party transactions with Sheffield.
That sort of thing would have helped
Hi,
1) Is it important to include the relevant assertion in EVERY audit procedure?
2) If we don’t include the assertion will we not be awarded marks.
You could think about using an assertion as a heading and setting out below 2 or 3 procedures to support that assertion
I’m not going to be definitive in my answer to your second question. Why would you not identify the assertion? If you use the assertion as a heading as I have suggested, then that will overcome your concerns
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