Discuss the audit test procedure Observation and how such a procedure would be used in an audit
Question:
Discuss the audit test procedure "Observation" and how such a procedure would be used in an audit of a Payroll or Accounts Payable process. What results or conclusions, if any, can you arrive at, if you have found no exceptions or errors.
B. Design & Operating Effectiveness:
1. For audits of a business process;
a) Which of the following should be performed first: test of operating effectiveness (TOE) or test of design adequacy (TOD)? Please provide your reasoning.
b) If you find exceptions or errors in either TOE or TOD, what should steps should the auditor take?
2. Is evaluating control design more challenging than evaluating operating effectiveness? Include your arguments for your position.
Government and Not for Profit Accounting Concepts and Practices
ISBN: 978-1118155974
6th edition
Authors: Michael H. Granof, Saleha B. Khumawala