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can someone help me plzzzzzzzzz
(1)what are the audit procedures for testing the assertions made by the sales and purchases figure that are in the FS?
(2) can the internal control procedures used for sales & purchases, be used by auditors as audit procedures?
The audit procedures for testing the assertions for sales and purchases in the income statement relate to: completeness, accuracy, cut-off, occurrence, and classification. So tests attacking those are required. For example, making sure that all sales made by year end have been posted at year end. Tests to ensure that sales and purchases are recorded accurately and don’t for example, include VAT, and that purchases are not debited to the wrong account.
There are two ways of finding the required evidence.
1 If the internal control of the company is very good, then by testing the controls we get assurance that errors will be unlikely or will be corrected by the client. Little substantive testing needs to be done to cover the assertions.
2 If the internal control is poor, then substantive tests will have to be carried out eg testing a high volume/value of transactions and by analytical procedures.
Tests of internal control therefore can provide audit evidence to support the assertions.
HTH
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