AuditExam4

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Author:
tsiemg
ID:
72488
Filename:
AuditExam4
Updated:
2011-03-12 19:58:30
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Auditing Exam
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Audit Exam 4
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  1. What is different when evaluating, reporting, & testing interal controls for a nonpublic company?
    • 1 Reporting Requirements-no requirement for an audit of interal controls
    • 2 Extent of required internal controls-management is responsible for establishing interal controls
    • 3 Extent of understanding needed-only to obtain a sufficient understanding
    • 4 Assessing control risk-preliminary assessment of control risk maximum
    • 5 Extent of tests of controls needed
  2. (3) Objectives in designing an effective internal control system
    • 1 Reliability of financial reporting
    • 2 Efficiency & effectiveness of operations
    • 3 Compliance with laws & regulations
  3. (5) Main Control Activities
    • 1 Adequate separation of duties
    • 2 Proper authorization of transactions & activities
    • 3 Adequate documents & records
    • 4 Physical control over assets & records
    • 5 Independent checks on performance
  4. (5) Step Approach to identify deficiencies, significant deficiencies & material weaknesses
    • 1 Identify the existing controls
    • 2 Identify the absence of key controls
    • 3 Consider the possibility of compensating controls
    • 4 Decide whether there is a significant deficiency or material weakness
    • 5 Determine potential misstatements that could result
  5. Step 1 Audit Procedures for A/R
    • Obtain an aged list of receivables;
    • Trace amounts to master file
    • Foot schedule
    • Trace to G/L
  6. Step 2 Audit Procedures for A/R
    • Obtain analysis of allowance & bad debt
    • Test accuracy
    • Examine authorization for write-offs
    • Trace to G/L
  7. Step 3 Audit Procedures for A/R
    • Obtain direct confirmation of A/R
    • Perform alternative procedures for nonresponses
  8. Step 4 Audit Procedures for A/R
    • Review A/R control account for period
    • Investigate unusual entries
    • Investigate significant +/- sales at Y/E
  9. Step 5 Audit Procedures for A/R
    Review receivables for any that have neen assigned or discounted
  10. Step 6 Audit Procedures for A/R
    Investigate collectibility of account balances
  11. Step 7 Audit Procedures for A/R
    Review lists of balances for amounts due from related parties or employees, credi balances & unusual items as well as notes receivable due after 1 year
  12. Step 8 Audit Procedures for A/R
    Determine that proper cutoff procedures were applied at the B/S date to ensure that sales, cash receipts, & credit memos have been recorded in the correct period

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