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Substantive Procedures - Coggle Diagram
Substantive Procedures
Trade Payables
Completeness/Cut-off
-From expenditure testing
-Generate exception report of missing supplier invoices
-List of GRNs near year-end
-List of pmts. made after Y/E
-List of unmatched GRNs
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General
-Schedule of payable balances and movements
-Reperform arithmetic accuracy of above
-Agree O/Bs
-Obtain mgmt. rep letter
-VAT is included
-Creditors ledger to accounts payable
Accruals
General
-Schedule of movements in sundry accounts
-Re-perform arithmetic accuracy of schedule
-Agree O/Bs
-VAT
Completeness
-Review cash books for period after Y/E to identify pmts that occurred after Y/E
-Enquire from mgmt. about possible renewals
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Provisions
General
-Obtain schedule showing movements & composition of provision balances
-Agree O/Bs & C/Bs
-Inspect adjusting journal entries
-Re-perform arithmetic accuracy
-Verify DT of provisions
Existence & Obligations
-Enquire from expert of probability of outflow of FEBs
-Experts competence etc.
-Can cost be reliably estimated
-Is there a past event & does provision relate to this event
-Models & assumptions used to create provision?
Completeness/Cut-off
-Legal counsel re; lawsuits
-Verify obligation arose at Y/E
-Ledger for legal fee expenses
Valuation/Accuracy/Allocation
-Consider whether costs have been included correctly
-Appropriate discount rate
-Costing estimates
-Re-perform calc
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PPE
Depreciation
-Re-perform calcs
-Appropriateness of UL, rates, etc.
-Enquire as to any changes in estimates
-Component approach appropriate?
Impairment
-Inspect PPE for signs of impairment
-Compare CA to RA for older assets
-Consult experts
-Re-perform impairment calcs
-Consider appropriateness of impairment
Disposal & Additions
-Obtain schedule of additions & disposals
-Re-perform arithmetic accuracy of costs & profits
-Inspect sale docs & bank records to sales proceeds
-Inspect purchase docs to verify dates ec.
-Vat is excluded
Authorisation
-Inspect minutes for approval of disposal. Co. Act link
-Compare actual to authorised amount
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Existence
-Inspect sample of assets for physical existence
-Inspect PPE schedule for incorrectly capitalised costs
-Maintenance schedules
Rights
-Enquire whether any items of PPE are pledged as security
-Enquire whether assets are on operating lease
-Veriffy that it is not capitalised
-Inspect contracts to ensure r&r are transferred