Describe How You Would Conduct The Audit Process

909 WordsJan 10, 20164 Pages
A. Describe how you would conduct the audit process, incorporating the analytical procedures you would use to investigate selected business transactions? To begin the audit, a review of previous 2 years of financial statements, provided by current or previous auditors for any unusual business transactions relating to revenue. The audit process with take the following steps: Planning Procedures: “The nature and extent of planning activities that are necessary depend on the size and complexity of the company, the auditor 's previous experience with the company, and changes in circumstances that occur during the audit. When developing the audit strategy and audit plan, the auditor should evaluate whether the following matters are important…show more content…
Knowledge about risks related to the company evaluated as part of the auditor 's client acceptance and retention evaluation; and the relative complexity of the company 's operations. ( Auditing Standard No. 9 //. (n.d.). 1. What steps will you take to review the company’s business transactions? Reviewing the trial balance for the entire year to see all transaction are accurately accounted for. 2. What would your plan be to utilize these procedures? As the auditor, the following reconciliations will take place: Reconciling all sub-ledgers to the general ledger for accurate interpretation of the business activity. For example, Accounts Payable Aging Report will be compared to the General ledger for the Accounts Payable account. The auditor must scan future payable transactions to see if they affect the current company outcome. B. Explain the appropriate field work needed to review high-risk business transactions for cash and revenue? The auditor must assess the transactions for how much of a risk factor is involved. When reviewing these transactions, auditor must be able to review the internal controls of the company’s accounting personnel. The segregation of duties is associated with the safeguarding of an organization 's assets and the topic known as internal control. An example of the segregation of duties would be a company 's requirement that the bank statement for its checking

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