The following are parts of a typical audit for a company with a fiscal year-end
ID: 2548418 • Letter: T
Question
The following are parts of a typical audit for a company with a fiscal year-end of July 31.
Requirements
a. Identify the phase of the audit in which each activity occurs.
b. Put parts 1 through 9 of the audit in the sequential order in which you will expect them to be performed in a typical audit.
Phases of the Audit
I.
Plan and Design an Audit Approach
II.
Perform Tests of Controls and Substantive Tests of Transactions
III.
Perform Substantive Analytical Procedures and Tests of Details of Balances
IV.
Complete the Audit and Issue an Audit Report
c. Identify those parts that will frequently be done before July 31.
Phase of Audit
1.
Understand internal control and assess control risk.
2.
Perform substantive analytical procedures for accounts payable.
3.
Confirm accounts payable.
4.
Perform tests of controls and substantive tests of transactions for the
acquisition and payment and payroll and personnel cycles.
5.
Perform other tests of details of balances for accounts payable.
6.
Perform tests for review of subsequent events.
7.
Accept the client.
8.
Issue the audit report.
9.
Set acceptable audit risk and decide preliminary judgment about
materiality and performance materiality.
Requirement b. Put parts 1 through 9 of the audit in the sequential order in which you will expect them to be performed in a typical audit.
Sequence of a typical audit
Start
July 31 Audit Report Date
End
Requirement c. Identify those parts that will frequently be done before July 31.
Put parts 1 through 9
I.
Plan and Design an Audit Approach
II.
Perform Tests of Controls and Substantive Tests of Transactions
III.
Perform Substantive Analytical Procedures and Tests of Details of Balances
IV.
Complete the Audit and Issue an Audit Report
Explanation / Answer
Part A :
Identify The Phase Of the Audit in which Each activity Occurs :
Answer :
(IV) Complete the Audit and Issue the Audit Report. In this Phase all the Audit Procedures are occured, then only the audit process is completed.
Part B:
Put parts 1 through 9 of the audit in the sequential order in which you will expect them to be performed in a typical audit.
Answer :
The Sequential Order is :
1. Accept the Client
2. Understand Internal Control and Assess Risk
3. Set acceptable audit risk and decide preliminary judgment about materiality and performance materiality.
4. Perform the Test controls and Substentive test of transactions for the acquisition and payment and payroll and Personal cycles.
5. Perform substantive analytical procedures for accounts payable.
6. Perform other tests of details of balances for accounts payable.
7. Confirm accounts payable
8. Perform tests for review of subsequent events.
9. Issue the audit report.
3. Set acceptable audit risk and decide preliminary judgment about materiality and performance materiality.
4. Perform the Test controls and Substentive test of transactions for the acquisition and payment and payroll and Personal cycles.
5. Perform substantive analytical procedures for accounts payable.
6. Perform other tests of details of balances for accounts payable.
7. Confirm accounts payable
8. Perform tests for review of subsequent events.
9. Issue the audit report.
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