I'm having trouble understanding lead schedule. I know that the lead schedule is the first sheet of each section found in working papers, but I want to ask does lead schedule contain the breakdown of the lets say, receivable? Can we make lead schedule for each & every account balance and transaction?
Please explain as how can we use or compare the lead schedule balances as substantive procedure?
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What is lead schedule?
6y ago#1Be aware that a lot of terms used in audit you will find explained in more details browsing on the internet https://www.accountingtools.com/articles/2019/5/22/lead-schedule
Since the automation of audit documentation, rather than have literally, one piece of A4-sized at the beginning of each audit section this might now be computerised into a single spreadsheet https://auditnz.parliament.nz/good-practice/csf/lead-schedules#:~:text=A%20lead%20schedule%20(also%20called,items%20and%20related%20note%20disclosures.&text=A%20lead%20schedule%20shows%20the,line%20item%20and%20note%20disclosure. You aren't expected to know this for exam purposes (but to know this might assist you in understanding its purpose.)
The lead schedule will document the audit procedures e.g. substantive procedures for an account balance and tests of control for a class of transactions. The lead schedule for receivables would have cross-references to the lead schedules for the related transactions (cash receipts and sales). To prepare a lead schedule is a procedure to document audit work (it is not a procedure to obtain audit evidence).
Thx :) It helps a lot
6y ago#3You are welcome!
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