1、Overall Audit Planand Audit Program,Chapter 10,Learning Objective 1,Use the five types of audit teststo determine whether financialstatements are fairly stated.,Types of Tests,Procedures to obtain anunderstanding of internal control,Tests of control,Substantive tests of transactions,Analytical proce
2、dures,Tests of details of balances,Types of Audit Tests andthe Audit Risk Model,Types of Audit Tests andthe Audit Risk Model,Analyticalprocedures(AP),Tests ofdetails ofbalances(TDP),Sufficientcompetentevidenceper GASS,+,=,AARIR CR,= PDR,AuditRiskModel,Typesof AuditTests,Role of all Audit Tests in th
3、e Sales and Collection Cycle,Learning Objective 2,Select the appropriatetypes of audit tests.,Relationship BetweenTypes of Tests and Evidence,Relationship BetweenTypes of Tests and Evidence,Type of Test,Procedures for internal control,Tests of controls,Substantive tests of transactions,Analytical pr
4、ocedures,Tests of details of balances,Inquiries ofthe client,Reperformance,Analyticperformance,Type ofEvidence,Audit Assurance at Different Levels of Internal Control Effectiveness,Learning Objective 3,Understand how informationtechnology affects audit testing.,Impact of Information Technology on Au
5、dit Testing,SAS 80 (AU 326) and SAS 94 (AU 319)provide guidance for auditors of entitiesthat transmit, process, maintain, or accesssignificant information electronically.,Impact of Information Technology on Audit Testing,Computer assisted audit techniques may beused to test automated controls or dat
6、a.,Reports produced by IT may be used to testthe effectiveness of IT general controls.,Learning Objective 4,Understand the concept of evidencemix and how it should be variedin different circumstances.,Variations in Evidence Mix,Audit 2MM,Audit 4MM,Amount of testing: Extensive, Medium, Small, None,Va
7、riations in Evidence Mix,SubstantiveTests ofTransactions,AnalyticalProcedures,Tests ofDetails ofBalances,Audit 1S ES,Audit 2M EM,Audit 3E ME,Audit 4E EE,Amount of testing: Extensive, Medium, Small, None,Learning Objective 5,Design an audit program.,Audit Program,Part 1:Tests of controls and substant
8、ivetests of transactions,Part 2:Analytical procedures,Part 3:Tests of details and balances,Audit Procedures,Apply the transaction-related audit objectivesto the class of transactions being tested.,2. Identify key controls that should reducecontrol risk for each audit objective.,3. Develop appropriat
9、e tests of controls.,4. Design substantive tests of transactions.,Four-Step Approach to Designing Control and Substantive Tests,Apply transaction-related audit objectivesto a class of transactions(Step 1).,Identify key controlsand make an assessmentof control risk(Step 2).,Design tests ofcontrols (S
10、tep 3).,Design substantive testsof transactions (Step 4).,Methodology for Designing Tests ofBalances Accounts Receivable,Identify client business risksaffecting accounts receivable.,Set tolerable misstatementand assess inherent riskfor accounts receivable.,Assess control risk for salesand collection
11、 cycle.,Methodology for Designing Tests ofBalances Accounts Receivable,Design and perform tests ofcontrols and substantive testsof transactions for sales andcollection cycle.,Design and perform analyticalprocedures for accountsreceivable balance.,Methodology for Designing Tests ofBalances Accounts R
12、eceivable,Design tests of details ofaccounts receivable balanceto satisfy balance-relatedaudit objectives.,Audit procedures,Sample size,Items to select,Timing,Approach to Designing Tests of Details of Balances,Apply transaction-related auditobjectives to a classof transactions.,Identify key controls
13、and make a preliminaryassessmentof control risk.,Approach to Designing Tests of Details of Balances,Design testsof controls.,Designsubstantivetests oftransactions.,Apply balance-related auditobjectives to an account balance.,Audit procedures,Sample size,Items to select,Timing,Design tests of details
14、 of balances.,Approach to Designing Tests of Details of Balances,Apply balance-related auditobjectives to anaccount balance.,Design testsof details ofbalances.,Decide tolerablemisstatement.,Make preliminaryjudgment aboutmateriality.,Design analyticalprocedures.,Decide acceptableaudit risk.,Assess in
15、herent risk.,Assess clientbusiness risk.,Learning Objective 6,Compare and contrasttransaction-related auditobjectives and balance-related audit objectives.,Relationship of Transaction- toBalance-Related Audit Objectives,Transaction-RelatedBalance-RelatedNature ofAudit Objective Audit Objective Relat
16、ionship,ExistenceExistence orDirectcompleteness,CompletenessCompleteness orDirectexistence,AccuracyAccuracyDirect,Relationship of Transaction- toBalance-Related Audit Objectives,Transaction-RelatedBalance-RelatedNature ofAudit Objective Audit Objective Relationship,ClassificationClassificationDirect
17、,TimingCutoffDirect,Posting andDetail tie-inDirectsummarization,Relationship of Transaction- toBalance-Related Audit Objectives,Transaction-RelatedBalance-RelatedNature ofAudit Objective Audit Objective Relationship,Realizable valueNone,Rights andNoneobligations,Presentation andNonedisclosure,Learni
18、ng Objective 7,Integrate the four phasesof the audit process.,Summary of theAudit Process,Summary of the Audit ProcessPhase I,Accept client and perform initial planning.,Understand the clients business and industry.,Assess clients business risk.,Perform preliminary analytical procedures.,Set materia
19、lity and assess acceptableaudit risk and inherent risk.,Understand internal control and assess control risk.,Develop overall audit plan and audit program.,Summary of the Audit ProcessPhase II,Assess likelihood of misstatementsin financial statements.,Plan to reduce assessedlevel of control risk?,Sum
20、mary of the Audit ProcessPhase III,Perform tests of key items.,Perform additional tests of details of balances.,Summary of the Audit ProcessPhase IV,Review for contingent liabilities.,Review for subsequent events.,Accumulate final evidence.,Evaluate results.,Issue audit report.,Communicate with auditcommittee and management.,End of Chapter 10,
