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Substantive Audit procedures (PPE Generics (NB ASSERTIONS valuation and…
Substantive Audit procedures
Substantive Audit procedures
THE GENERICS AND DON'T FORGETS
S – Schedule
S - System
S – Sample
A – Accounting
A – Analytical review procedure
A – Adjusting Entries
A – Allowances
A – Accuracy
E-Expert
T=Tax
C- Cut Off
R-Rep letter
A-Agree
P-Present value
The structure
WHAT CAN I DO MAKE SURE THAT IT DID/WAS CORRECT FOR EACH COMPONENT AND RELATED SOURCE DOCUMENT
Audit verb
Who/What document
For what evidence
To determine what?
Types of questions
The no information given and rely on generics
SSS AAAA EAT CRAP
If you see a contract NB IT MUST BE VAILD
Who signed it
do they have authority to sign it
The names of who signed it and the date
IFRS complexity being tested: Audit management application of IFRS KNOW WHAT THE ACCOUNTING IS
A lot of information about events, conditions, numbers and transactions and then audit (the huge markers)
General Procedures
ARPs
Test of Detail (where most of the marks are)
What is the
Accounting (for each component)
When
Source
ROMM
MAF
Tax
Assertions to pick up any additional ROMM
Any data CAATs (last resort(
Trade receivables (the generics)
OB to CB
Schedule
totals accurate
Complete
dr/cr balances correctly classified
Impairment of debtors
Refusal to pay
Credit limits exceeded
Expressed inability to pay
refusal to pay
Obtain age analysis
sample and agree to GL
Reperform age analysis
Sales to GL (completeness) and GL to sales (occurrence)
Credit terms
Trade payables (the generics)
Completeness
unrecorded liabilities
agree accounts payable listing to major suppliers and follow up on omissions
cast and cross cast totals
ABI the listing to the GL
Agree payment made post year end were recorded as liabilities at year end
Cut off procedures
Recon suppliers statement to AP listing for major suppliers
authorized order forms BS and ACC payable to ACC listing to see if included at year end
Present obligation
validate suppliers
Inventory Generics (Valuation, Accuracy, Completeness and ARPs maybe existence and rights)
NRV vs cost (must be at lower of cost and NRV)
Impairment indicators
Accuracy
Purchased
Manufacturing (IAS 2)
Raw materials
Labour costs
overheads
WIP
Completeness
PPE Generics (NB ASSERTIONS valuation and accuracy, rights, existence, classification of costs)
Obtain schedule of OB/disposals/CB
Additions
Imports and where the forex gain loss went
Present value calculations
Construction of machinery (classification) borrowing costs
Services costs
Disposals
Closing Balance
Existence
Valuation
Depreciation
Impairment
Revaluations
Rights
Other generics (heavily based on accounting)
Business combinations and goodwill
Intangibles