This post addresses audit program outlines and audit issues.
Not what you're looking for?
Audit program outlines in detail what an auditor plans to do and the expected required time to accomplish each task. An audit engagement may involve more than one audit program. For example, we can have an audit program for accounts receivable, one for cash, one for inventory, etc.
can you describe the benefits of audit program in terms of resource planning and other aspects of auditing?
Auditor before they accept a new client or continue to service existing clients, they conduct audit risk. It is not always possible to completely avoid risk. Our attempt is always to keep it at an acceptable level. The Audit Risk Assessment involves considering multiple factors one of which is management integrity. If the leadership of a company is engaged in an illegal activity, this raises a red flag on the Audit Risk assessment.
Your thoughts?
Planning is an important part of auditing. Planning involves acquiring full understanding of the business to be audited and its environment, the internal control, and the audit risk. It is also at this stage that the audit determines what it considers to be a material misstatement.
What is materiality (in your own words)? What steps would you apply to determine materiality?
Purchase this Solution
Solution Summary
This solution discusses the following:
Audit program outlines in detail what an auditor plans to do and the expected required time to accomplish each task. An audit engagement may involve more than one audit program. For example, we can have an audit program for accounts receivable, one for cash, one for inventory, etc.
can you describe the benefits of audit program in terms of resource planning and other aspects of auditing?
Auditor before they accept a new client or continue to service existing clients, they conduct audit risk. It is not always possible to completely avoid risk. Our attempt is always to keep it at an acceptable level. The Audit Risk Assessment involves considering multiple factors one of which is management integrity. If the leadership of a company is engaged in an illegal activity, this raises a red flag on the Audit Risk assessment.
Your thoughts?
Planning is an important part of auditing. Planning involves acquiring full understanding of the business to be audited and its environment, the internal control, and the audit risk. It is also at this stage that the audit determines what it considers to be a material misstatement.
What is materiality (in your own words)? What steps would you apply to determine materiality?
Solution Preview
First paragraph comment:
The main issue that we're trying to address here with resources planning and other aspects of auditing has to do with understanding the control environment. The auditor must understand the internal control environment to the degree that is satisfactory enough to design a comprehensive audit program. The resources come into play in the sense that if the auditor will need the services of a specialist, there will be planning already in place to engage those services. If the company has a high percentage of sales on account and the auditor is not familiar with that type of sales, like sales that involve revenue where part of the revenue is recognized now and part later, or sales for a specific type of activity within an industry, like a coal mine - the auditor would need to engage specialists through proper resource ...
Purchase this Solution
Free BrainMass Quizzes
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media