1.For this task performance, the students will perform the role of an audit associate.

2.Accomplish the Audit Planning Document given the following facts:

Client Name: Carl John Corporation, Inc.

Period end: December 31, 20X2

3.Enter the initials of the person in-charge of the following:

Prepared: Two (2) audit associates

Reviewed: Senior audit associate and manager

Partner

For the date column, write the date today.

After filling out the information above, proceed to Part I - Audit Scope. Fill in the blanks with the correct term/phrase to describe the scope of the audit.

Audit

April 15, 20X2

Philippine Financial Reporting Standard (PFRS)

Philippine Standards on Auditing (PSA)

Engagement letter

Carl John Incorporation.

4.Part II - Risk Assessment and Audit Approach

December 31, 20X2

Philippine

Walkthrough of significant process

Management Letter

Opinion

Substantive Testing of Accounts

i.For Column 1, write the appropriate significant processes that describe the subprocesses and accounts affected on the space provided. Choices are given below.

a.Expenditure Cyclec.Financial Statement Close Process

b.Revenue Cycled.Payroll Cycle

Take note of the following definitions for reference:

Expenditure cycle - Involves the activities associated with the payment of goods and services, plant assets, and labor.

Revenue cycle (revenue and collection cycle) - Consists of the activities relating to exchanging goods and services with customers and collecting revenue in cash.

Financial statement close process - Includes the activities a company undertakes to close its books, correct potential errors, make specific adjustments, and accurate financial statements in accordance with applicable accounting standards.

Payroll cycle - Also included in the expenditure cycle but focuses mainly on processes for recording time and attendance and converting that data into payroll calculations and disbursements.

ii.For Column 2, given the control risk assessment (high/low), select whether you will rely on the control of the company or not. Encircle the letter of your answer.

iii.On the next table, write the appropriate significant accounts that describe the audit approach related to those accounts. Choices are given below.

a.Trade and other payables

b.Cash and cash equivalents

c.Trade and other receivables

d.Expenses

e.Revenues

Client name:

Sign-off:

Initials

Date

Prepared:

Reviewed:

Period end:

Partner:

I.Audit Scope

Audit Scope

Remarks

Describe the scope of the audit

Theteamwasengagedto , in accordance with

_,the financial statements of for the period ended and to provide an on whether it is in conformity with .

The scope of our audit work includes:

1. ;

2. Test of Controls;

3. ;

;

4.Assist in the preparation of schedules required by the Securities and Exchange Commission

5.Render management letter comments

II.Risk Assessment and Audit Approach

Risk Assessment and Audit Approach

Remarks

Risk assessment and audit approach discussion, including the following:

Internal controls, including accounting systems

Significant risks

SIGNIFICANT PROCESS

CONTROL RISK ASSESSMENT

ACCOUNTS AFFECTED

PLANNED AUDIT STRATEGY

Related Party Transaction

Accruals, Deferrals, and Amortizations

Low;

(a)Plan to

rely on control

(b)Plan not

to rely on controls

Cash

Receivables

Related party balances

Payables

Controls and Substantive Approach

Revenue Recognition

Accounts Receivable Management

Collection

High:

(a)Plan to

rely on controls

(b)Plan not

to rely on controls

Cash

Trade and other receivables

Due from related parties

Revenue

Controls and Substantive Approach

SIGNIFICANT ACCOUNTS

AUDIT APPROACH

Bank confirmations (Year-end)

Examine the client's bank reconciliation as of year-end, including deposit-in-transit accounts and outstanding checks, to verify the proper reconciliation of bank statements and general ledger accounts.

Cash cut-off. Test of intercompany transfers five (5) days before and after cut-off

Cash valuation. Test of valuation of foreign currency denominated cash in bank

Goods (or services) Received

Low:

(a)

(b)

Low;

(a)

(b)

Plan to rely on control Plan not to rely on controls

Plan to rely on control Plan not to rely on controls

Cash

Inventory

Other assets

Property and equipment

Payables

Cost and Expenses

Cash

Payables

Cost and Expenses

Controls and Substantive Approach

Accounts Payable Management

Cash Disbursement Processing

Timekeeping Policy

Controls and Substantive Approach

Expense recognition

Cash Disbursement Processing

Review of SL for unusual items.

Reconcile the SL to the GL account and investigate large and unusual reconciling items

Send with whom the Company has significant amounts of liabilities. Perform the alternative procedures by doing the subsequent payment testing on those samples confirmed.

Perform cut-off tests for goods and services received, as well as for supplier credit memos 15 days before and after cut-off.

Perform an overall analytical review.

Perform a test of control by selecting 25 samples of transactions and investigating for any significant deviations.

Perform reconciliation of amount per trial balance with the supporting schedules provided.

Review the components of each schedule provided to identify unusual transactions included, unusual amounts, etc.

Perform trend and ratio analyses and compare with previous year's results.

If subject to withholding taxes, see if the Company withheld the proper amount of withholding taxes (expanded) and note any deviation. Evaluate and assess the impact of possible tax exposure of the Company.

Agree receivables SL to the GL control account and investigate unusual reconciling items.

Verify the existence through confirmation or subsequent cash receipts or a combination of these procedures.

Perform cut-off testing by selecting transactions of the Company 30 days before and after the cut-off period.

Check credit balances and unusual items.

Review the Company's aging and assess collectability of accounts over one (1) year.

1.For this task performance, the students will perform the role of an audit associate.

2.Accomplish the Audit Planning Document given the following facts:

Client Name: Carl John Corporation, Inc.

Period end: December 31, 20X2

3.Enter the initials of the person in-charge of the following:

Prepared: Two (2) audit associates

Reviewed: Senior audit associate and manager

Partner

For the date column, write the date today.

After filling out the information above, proceed to Part I - Audit Scope. Fill in the blanks with the correct term/phrase to describe the scope of the audit.

Audit

April 15, 20X2

Philippine Financial Reporting Standard (PFRS)

Philippine Standards on Auditing (PSA)

Engagement letter

Carl John Incorporation.

4.Part II - Risk Assessment and Audit Approach

December 31, 20X2

Philippine

Walkthrough of significant process

Management Letter

Opinion

Substantive Testing of Accounts

i.For Column 1, write the appropriate significant processes that describe the subprocesses and accounts affected on the space provided. Choices are given below.

a.Expenditure Cyclec.Financial Statement Close Process

b.Revenue Cycled.Payroll Cycle

Take note of the following definitions for reference:

Expenditure cycle - Involves the activities associated with the payment of goods and services, plant assets, and labor.

Revenue cycle (revenue and collection cycle) - Consists of the activities relating to exchanging goods and services with customers and collecting revenue in cash.

Financial statement close process - Includes the activities a company undertakes to close its books, correct potential errors, make specific adjustments, and accurate financial statements in accordance with applicable accounting standards.

Payroll cycle - Also included in the expenditure cycle but focuses mainly on processes for recording time and attendance and converting that data into payroll calculations and disbursements.

ii.For Column 2, given the control risk assessment (high/low), select whether you will rely on the control of the company or not. Encircle the letter of your answer.

iii.On the next table, write the appropriate significant accounts that describe the audit approach related to those accounts. Choices are given below.

a.Trade and other payables

b.Cash and cash equivalents

c.Trade and other receivables

d.Expenses

e.Revenues

Client name:

Sign-off:

Initials

Date

Prepared:

Reviewed:

Period end:

Partner:

I.Audit Scope

Audit Scope

Remarks

Describe the scope of the audit

Theteamwasengagedto , in accordance with

_,the financial statements of for the period ended and to provide an on whether it is in conformity with .

The scope of our audit work includes:

1. ;

2. Test of Controls;

3. ;

;

4.Assist in the preparation of schedules required by the Securities and Exchange Commission

5.Render management letter comments

II.Risk Assessment and Audit Approach

Risk Assessment and Audit Approach

Remarks

Risk assessment and audit approach discussion, including the following:

Internal controls, including accounting systems

Significant risks

SIGNIFICANT PROCESS

CONTROL RISK ASSESSMENT

ACCOUNTS AFFECTED

PLANNED AUDIT STRATEGY

Related Party Transaction

Accruals, Deferrals, and Amortizations

Low;

(a)Plan to

rely on control

(b)Plan not

to rely on controls

Cash

Receivables

Related party balances

Payables

Controls and Substantive Approach

Revenue Recognition

Accounts Receivable Management

Collection

High:

(a)Plan to

rely on controls

(b)Plan not

to rely on controls

Cash

Trade and other receivables

Due from related parties

Revenue

Controls and Substantive Approach

SIGNIFICANT ACCOUNTS

AUDIT APPROACH

Bank confirmations (Year-end)

Examine the client's bank reconciliation as of year-end, including deposit-in-transit accounts and outstanding checks, to verify the proper reconciliation of bank statements and general ledger accounts.

Cash cut-off. Test of intercompany transfers five (5) days before and after cut-off

Cash valuation. Test of valuation of foreign currency denominated cash in bank

Goods (or services) Received

Low:

(a)

(b)

Low;

(a)

(b)

Plan to rely on control Plan not to rely on controls

Plan to rely on control Plan not to rely on controls

Cash

Inventory

Other assets

Property and equipment

Payables

Cost and Expenses

Cash

Payables

Cost and Expenses

Controls and Substantive Approach

Accounts Payable Management

Cash Disbursement Processing

Timekeeping Policy

Controls and Substantive Approach

Expense recognition

Cash Disbursement Processing

Review of SL for unusual items.

Reconcile the SL to the GL account and investigate large and unusual reconciling items

Send with whom the Company has significant amounts of liabilities. Perform the alternative procedures by doing the subsequent payment testing on those samples confirmed.

Perform cut-off tests for goods and services received, as well as for supplier credit memos 15 days before and after cut-off.

Perform an overall analytical review.

Perform a test of control by selecting 25 samples of transactions and investigating for any significant deviations.

Perform reconciliation of amount per trial balance with the supporting schedules provided.

Review the components of each schedule provided to identify unusual transactions included, unusual amounts, etc.

Perform trend and ratio analyses and compare with previous year's results.

If subject to withholding taxes, see if the Company withheld the proper amount of withholding taxes (expanded) and note any deviation. Evaluate and assess the impact of possible tax exposure of the Company.

Agree receivables SL to the GL control account and investigate unusual reconciling items.

Verify the existence through confirmation or subsequent cash receipts or a combination of these procedures.

Perform cut-off testing by selecting transactions of the Company 30 days before and after the cut-off period.

Check credit balances and unusual items.

Review the Company's aging and assess collectability of accounts over one (1) year.