Acct 542 Audit Proposal Essay

Scoping and Evaluation Judgments in the Audit of Internal Control over Financial Reporting 12.1 EyeMax Corporation . . Evaluation of Audit Differences

This course is the first in a two-part series that deals with auditing a company 's financial reports, internal controls, and

The audit team focused on preforming groundwork analytical procedures. A comparison of the performance of Smackey’s Dog Foods Inc to other similar industries was used to validate the original assessment of the risks. Performing the procedures helped detect areas that pose a high risk of the material misstatements. Another important part of the planning of the audit was to set a balance of materiality that is appropriate. The situations that

Dq1 What are the steps that are required for an auditor to finalize the audit? Which steps are the most crucial to the outcome of the audit? How will these steps affect the final audit decision?

There are four things that an auditor needs to assess prior to performing an audit:

In businesses today, it is imperative that the accounting system be tied into every aspect of a business and integrated within all of the information systems in use. Therefore, before any system is updated or changed, the accounting system must be considered and analyzed for compatibility and integration. Kudler Fine Foods hired a consulting firm to “assist in the selection and installation of a

The aim of this report is to develop an audit plan using the 2007/2008 annual reports of the WesFarmers. This report will provide an understanding of the underlying concepts of an overall audit strategy. This strategy will bring forward the direction and scope of the WesfFarmers audit plan. This report will address five major points these are as follows:

|Develop Audit programs for the substantive audit procedures for the balance sheet and income statement |35 |

There is a lot that can be learnt from the American Food Suppliers’ case study. First during an audit, an auditor should ensure that they obtain the relevant assurance to tackle the audit risk. It is often assumed that the information obtained for third party is more reliable than the evidence collected by the company being audited. However, in the case study, the company had already colluded with its suppliers to provide false information

Auditors measure the amounts of receivables on hand, how old the accounts are in the general ledger, and the amount of bad debts the company is estimating for non collectable accounts. Testing will also be done to ensure that money collected is posted to the correct receivables accounts; this test alerts auditors to any fraudulent accounting practices in Apollo Shoes such as embezzlement or theft. If a large number of the random sample contains several violations of GAAP or the company's accounting policy, a second sample will be tested to determine how pervasive the errors are in the accounting process for the sales and collection cycles. Upon completing the audit, a written assessment will be given to Apollo Shoes management with recommendations on correcting any accounting violations (Arens, Elder, & Beasley, 2006).

The chief executive of the company was closely working with the vendors whose confirmations were vital in the auditing work and hence they could have submitted false confirmations. The auditing firm established a national risk management program for its clients and so national reviews were done to identify the high risk items in the financial statement. The vendor allowances were particularly high but they were not documented. As such, the auditors were supposed to demand for the documentations and compare them with the real figures. It is however noted that most of the documentations received were non-standard and this could have led to a different audit report given that vendor allowances were earlier identified as a high risk area. Inventory management was found to be poor especially in the allowances for inventory reserves. The audit firm was therefore obliged to carry out a thorough evaluation of the inventory reserves and determine whether it was reasonable. The valuation was also supposed to include all classes of inventory but for the case of the company, the evaluation excluded instances where no sales had been made. Hence, this evaluation could not accurately represent the position of the inventory reserve in the company. (Waters,2003)

When engaged in auditing a public firm, such as Apollo Shoe Inc., an auditor must determine when to trust in the company’s internal controls and when to ascertain auxiliary testing methods are obligatory to analyze control risks. The sales and collection cycle is rather a substantial fraction of the audit because this unique segment employs a multitude of documentation and records ranging anywhere from customer and sales orders, shipping documents, credit memos, and general journal entries; therefore, a working

Learning Objective: 13-09 Be familiar with substantive analytical procedures used to audit inventory and related accounts.

SAS No. 99 commands auditors to perform unpredictable audit tests. For example, visiting company locations unannounced to count inventory, test accounts that are not typically performed or at low risk, request letter of confirmation from employees about information provided to auditors, interview client personnel in different locations, and using different sampling methods. More auditing tests that can be performed are requesting inventory count at the end of the reporting period and perform substantive analytical procedures using disaggregated data. Testing the management override control is crucial as well. A response to management override would be changing the nature, time and extent of auditing procedures. Executives can commit financial

This article initiates with the introduction on what is audit planning. It basically addresses the audit plan strategy of K & S Corporation limited’s Financial Statements. Being an external auditor of the company, key factors to be considered in auditing the financials of the subject company have been discussed in the article. The most significant accounts at risk being materially misstated have been critically examined citing the possible risks associated with such accounts. Last but not the least, the article concludes with recommendations with respect to audit assessment plan of the company. Hence, this article seeks to act as a ready reckoner guide for an audit manager in audit planning of K & S Corporation Limited.