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as i have the read i noticed all systems like sale,purchase have common assertion to test controls of those system can anyone tell the common assertions ?
other thing is first we apply test of controls and then apply substantive procedures for high risky areas or on material item these may include analytical procedure and test of detailwe do sampling in both test of controls and substantive procedure or only in substatntive procedure ?
i didnt solved the revision kitt now so is it ok if i do solve last four attempts or any other way as i cant solve whole kitt now?
thanx in advance for anyone help here
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Percived high audit Risk is countered by e reducing detective risk (risk that auditor’s procedure do not detect material misstatement) by altering nature, extent & timing of audit proceedures. In High or low risk the auditor carries out both control & substantive tests but to be honest in high risk areas an auditor tends mo to the substantive testing whilst control tests are stil used to get a picture of the system’s accuracy.
Yes, due to volumes of transactions of certian cycles (sales,purchases etc) the auditor ends up sampling taking into account (a/c) level of risk after obtaining an impression of strength of the system via control tests. In these substantive tests the auditor will be testing the following assertions (PROVE):
a)Presentation- correct disclosers & classifications have been followd in line with IFRS
b)Records- proper a/c records are kept
c)Ownership- items belong to the company
d)Valuation- items have been appropriately & acurately valued
e)Existance- assets & liabilities exist for sureThese assertions are tested by the following proceedures (AEIOU)
a)ANALYTICAL REVIEW-using logic
b)ENQUIRY
c)INVESTIGATION
d)OBSERVATION
e)RECOMPUTATIONI hope you find the above useful.
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