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Sir, I still found it difficult to write out audit procedures for example the substantive procedures for sales system though I know the basic flow from ordering,despatch, invoicing, chase payment and recording of payment. I know we have to use ACCA COVER and AEIOU to do audit procedures, but still not able to apply…..
Do you have any suggestions or any standard rules or steps and plans to apply to the audit procedures for sales system and other systems ? Many thanks.The only general advice is, as you stated. to think which assertions you need to collect evidence for and then to collect that evidence. Generally substantive tests consist of tests of detail and analytical procedures.
Tests of detail means looking at documents and accounts and tracing through transactions as they move through the system. So if you were performing substantive tests on the Rent amount in the FS, compare to last year (analytical procedures) and nivestigate the reason for major changes. For tests of detail pick some of the debits in the account and trace to cash payments and to rent demands/invoices, Check that the cutoff is correct (accruals/prepayments). Go to the Cr side of the cash book and look at some payments to the landlord and trace back to the Dr in the rent account.
Lots of document inspection, reperformance, tracing, matching.
HTH
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