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I have been struggling in tests of control & substantive procedure where I am trying to memorize number of documents that auditor need to inspect to obtain evidence such as aged receivable analysis, Fixed assets register, Standard cost card etc.
But the problem is that I find it difficult as what are the appropriate supporting documents to inspect & verify different systems (receivable system, purchase system, inventory system etc).
For example, to test whether the bad debt of receivable is collectible or uncollectible at the year-end. For this, the auditor needs to inspect aged receivable analysis to review the slow-moving debts from customers.
1) Please help me on this as how many supporting documents should I memorize to different systems?
2) Can you list some of the documents that will be needed for auditor to inspect?You should know all the documents mentioned in Chapter 13 of our notes – you should know all the books of prime entry and ledgers, control a/cs, reconciliations and trial balance from Financial Accounting (FA/F3) – if you do not have this assumed knowledge I recommend you download our notes, for reference, https://opentuition.com/acca/fa/acca-financial-accounting-fa-notes/ and watch the supporting videos of the relevant chapters. Remember – what the auditor is reporting on is the financial statements prepared from the accounting system – you must therefore understand how transactions get recorded in the system. Yes you may have to build up your vocabulary but you really shouldn’t think of it as “memorising” – many documents, records, etc are precisely what their name implies.
Thanks! It really helped me.
But as you know that there are other documents that need to be aware such as receivable, inventory, payroll, depreciation and many other items on the financial statement. If you don’t mind can you please list a number of documents for all those items that are tested for tests of control & substantive that is asked frequently?
I do not have a list to share with you. I suggest you make your own list based on what you know already under each of the main headings and as and when you come to something new (as you work through past questions) you add it to the list.
In the syllabus, which you can download from here if you have not already done so https://www.accaglobal.com/ie/en/student/exam-support-resources/fundamentals-exams-study-resources/f8/syllabus-study-guide.html you will find a list of the examinable “cycles” in c3b):
i) The sales system;
ii) The purchases system
iii) The payroll system
iv) The inventory system
v) The cash system
vi) Non-current assetsAnd balances are listed in D4 The audit of specific items.
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