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Hi
I failed on paper f8 with the score of 49 on Dec 09.I supposed that I have some misunderstanding in this paper. And know ,I have some new ideas about this paper,but there’s still some points I am not that sure about.
First it’s about the difference between ‘design audit procedure to test the system’ and ‘audit procedures to test the control’. I noticed that when examiner asked about testing the system, he listed some items such as ‘select samples of sales invoice,trace to sales ledger to see if these invoices are correctly recorded’ .But when the Q is ‘test the control’,this kind of answers are not involved in the answer lists.
So,if asked to test the system,we need not only do test of control ,but also conduct some substensive test of transations which mainly focus on the correctness of data recording and posting in the ledgers? But if asked to do test of control,we only need to detect the controls in the system (PAPAMOSS),and test them,and the main techniques are: observing ,inquiry,inspection and re-performanc. Is it right to say so?And are ‘re-performance’ and ‘walk through test’ the same thing?I’m not that clear how to use ‘walk through test’
And then,after testing the system,we would conduct other substensive procedures,just like analytical procedures and substensive test of detail. Is it right to say that’if you are satisied with the TOC & Substensive test of transation &AP,you can reduced the amount of test of detail conducted at the year end’?
Also, the audit objective is derived from the asserions of the Financial Statement.When we conduct audit procedures ,we must related to certain audit procedures.So ,are the audit objectives the same as assertions? for eg.the audit objective of account balance are ” existence , completeness, valuation&allocation, rights &obligation’?
I am looking forward for your help!!!Thanks!!!
Hi,
walk through test’ means,if you are not satisfied the evidance obtained,then do sudden visit,& find out the or campare the evidance which you have,.
hope,this is correct.
Regards.
krish3898‘design audit procedure to test the system’ and ‘audit procedures to test the control’.
To me, despite differences you might have seen in answer, I think these are the effectively the same. Both are talking about the system of internal controls. The first requirements might be talking about testing many controls int eh system and the second might be talking about testing a single control, but I don’t think substantive tests are required.
Reperformance means that you reperform a procedure to make sure it’s been carried you correctly. For example, you might reperform a bank reconciliation to ensure it was done properly.
A walk through test is quite different. It means choosing a transaction and following it through the system. This is used to ensure that you understand the system properly: controls, recording, filing.
‘Audit objective’ is not a term that’s used very commonly. I suppose that ultimately, the audit objective is to be able to say with reasonable asxsurance that the FS do not contain material mistatements. To do that you need to collect sufficient appropriate audit evidence about each assertion of each figure in the FS.
HTH
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thanks~~~~
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