You are the audit manager at a CPA firm. The audit senior has completed drafting an audit
Question:
You are the audit manager at a CPA firm. The audit senior has completed drafting an audit program for your client audit engagement. They have asked you to review the following selected procedures from their audit program.
REQUIRED:
Comment on the relevance and reliability of the proposed audit evidence and procedures. Specifically:
Identify the type of evidence that is being obtained (or the evidence-gathering procedure performed) by each of the following stated procedures.
Do the following procedures address the stated assertions? Support your answer. If not, identify the assertion that the procedure is testing.
How persuasive is the audit evidence that is being obtained? (ie: low or high) Support your answer. If the evidence is low, design an alternative evidence/procedure would you gather/perform that would be of higher persuasiveness.
AUDIT PROCEDURE:
Account | Assertion | Audit procedure |
Sales | Cut-off | Inquire of the shipping clerk as to the number of the last goods shipped at year end. Provide the number to the sales clerk and ask whether the shipment was recorded in the sales journal before the period end. |
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley