...Internal Audit of Al Fresco Audit Program Objective: To find out whether their financial information is free from irregularities. Audit Steps to Be Completed I. Planning and Administration Section 1. Prepare permission letter and engagement letter, and obtain approval from the audit director and the auditee. 2. Conduct audit planning, and the following should be discussed: * Timing of audit and planned participants * Timing of fieldwork * Internal control checklist * Risk areas/ internal controls * Assignment of audit objectives * Testing to be performed * Budgeted hours * Permission letter * Engagement letter 3. Conduct pre-audit interview with auditee and document discussions held. 4. Set the schedule of the preliminary audit with the applicable management and discuss the following: * Timing of the audit * Audit objectives * Key contacts for the audit 5. Obtain permission to access relevant information like: * Organizational chart * Relevant reports utilized by the auditee * Strategic documents 6. Prepare and review the internal control questionnaire: * What is the Al Fresco’s perceived internal controls strengths and weaknesses? 7. Inquire of the auditee as to whether any relevant process flowcharts exist. If not, consider developing one for the permanent file. II. Fieldwork First Objective: To ascertain whether the use and recording of petty cash funds...
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...Audit Program Design Part III Sheila Dunn ACC 546 May 13, 2013 Cecil Lucy Audit Program Design Part III Inventory and Warehouse Cycle The inventory and warehouse cycle can be divided into five sections: acquire and record raw materials, labor, and overhead, internally transfer assets and costs, ship goods and record revenue and costs, physically observe inventory, and price and compile inventory. The following will be the tests of control, substantive tests of transactions, and analytical procedures. 1. Acquire and record raw materials, labor, and overhead a. Tests of control i. Check to make sure that all materials ordered have been accounted for ii. Check to make sure that there are records for all orders iii. Check payroll from payroll and personnel cycle iv. Check to make sure that the inventory is not overstocked b. Substantive test of transactions i. Take a sample of the orders placed ii. Make sure that the sample reflects that all material were received iii. Sample the payroll to make sure there are no discrepancies iv. Sample the inventory to make sure that it is replenished and constantly moving c. Analytical procedures i. Compare the results to prior years to ensure that the data matches up ii. Determine if there any risks 2. Internally transfer assets and costs a. Tests of controls i. Check financial statements to ensure assets were transferred ii. Check for the costs related to the business ...
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...Audit Program Design ACC/546 Chandria Willis August 3, 2015 Frank G. Elliot Apollo Shoes, Inc. Langley, ME Dr Mr. Elliot, We have developed test o controls of substantive test of transactions, and analytical procedures for the audit of Apollo Shoes Inc.’s sales and collection cycle, payroll and personnel cycle, acquisition and payment cycle, and Inventory and Warehousing cycle in line with the generally accepted auditing principles. The objective is to verify existence, accuracy and completeness. A substantive test should be associated with each of the transactions related to the audit objectives. The objectives of the audit include the occurrence, accuracy, completeness, posting, classification, summarization, and timing. Analytical Procedures must be performed in the planning stage of the audit and reviewed near the end of the audit. This serves to provide additional assurance to the auditor that the account has also been presented fairly in line with the generally accepted accounting principles. Based on previous research, it is our opinion...
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...Audit Design Program III Tonya Gaines ACC 546 March 4, 2013 Michael De Marco Audit Design Program III During phase III of the audit plan, Anderson, Olds & Watershed (AOW) will focus on two important cycles: Inventory and Warehousing Cycle and the Cash Cycle. There are six classes of transactions in the inventory and warehousing cycle: process purchase orders, receive raw materials, store raw materials, process of goods, and store finished goods and ship finished goods. Cash account is a part of every cycle except inventory and warehousing. Cash is primarily important and extremely vulnerable to fraud that is why auditor needs to be careful in the assessing risks in auditing cash account. Anderson, Olds & Watershed’s (AOW) responsibility is to conduct a fair and unbiased audit. We will conduct these tests and procedures according to PCAOB auditing standards. There is not absolute assurance that all misstatements or errors will be discovered. Inventory and Warehouse Cycle The audit of the inventory and warehousing cycle is designed to test inventory counts, processes and operations. The classes of transactions in this cycle includes sales, value of inventory, cost of goods sold, sales returns and allowances and estimates of allowance for slow moving inventory. The table below displays the interrelationship of the transactions related to audit objectives, tests of controls, and substantive test of transaction that should be approved during the...
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...include the significant regulations and guidelines related to audits of internal control. We will identify the internal control risks within Apollo Shoes as well as a description of the relationship between internal controls and the audit process, and a brief synopsis of our responsibility in detecting and reporting fraud. Guidelines According to COSO “Internal control is broadly defined as a process, effected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives.” “While internal control is a process, its effectiveness is a state or condition of the process at one or more points in time.” The Sarbanes-Oxley Section 404 Act, requires management to produce an “internal control report” along with the annual Exchange Act report. This report is required to confirm “the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting.” The report must also “contain an assessment, as of the end of the most recent fiscal year of the Company, of the effectiveness of the internal control structure and procedures of the issuer for financial reporting.” To successfully complete this management generally adopts an internal control framework such as that described in COSO. According to COSO here are the guidelines for the framework. • Assess both the design and operating effectiveness of selected internal controls...
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...Audit Program Design Part II ACC/546 January 31, 2011 At Anderson, Olds, and Watershed, we have developed the following test of controls, substantive test of transactions, and analytical procedures for the audit of the sales and collection cycle, the payroll and personnel cycle, and the acquisition and payment cycle of Apollo Shoe Company. The tests are consistent with generally accepted auditing methods in The United States of America. The tests will be designed to prove existence, completeness, and accuracy. Please take the time to look over the proposed tests and techniques and feel free to ask any questions regarding the tests that will be performed. Sales and Collection Cycle To test for existence, AOW will verify whether sales invoices are attached to the bill of lading or not and check to see if there are any invoices with unusual transactions or amounts. Next, we will check completeness by verifying the sequence of sales documents and trace the selected sales documents through the sales and collection process. We will also verify the prices of selected sale items and recompute the sales invoices that are billed to the customer for accuracy. The next step is to verify the classifications of sales transactions by examining the document package for internal verification and examining sales invoices for proper account classifications. The final audit objective test will consider timing. We will verify that sales are recorded on the correct dates. We will also verify...
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...Audit Program Design Part Ii Audit Program Design Part II Company: Apollo Shoe Company Audit Begins: January 19, 2010 Audit Ends: March 31, 2010 (Tentative) AUDIT SCOPE: Sales/revenue and collection cycle Payroll and personnel cycle Acquisition and payment cycle All Transactions, orders, and payments processed January 1, 2007 through December 31, 2007 AUDIT OBJECTIVES: • To determine internal control compliance to sub objectives for payroll and personnel cycle, sales/revenue and collection cycle, and the acquisition and payment cycle. • To obtain control evidence and documentation about the existence, accuracy, classification, timing and completeness of recorded acquisition transactions. CRITERIA: Statement on Auditing Standards (SAS) No. 99 – Fraud Auditing Standards AUDITOR ASSIGNMENTS: John Butler – Sales and Collection David Sargent – Payroll and Personnel Perry Boydstun – Acquisition and Payment Cycle METHODOLOGY: Each auditor will perform their assigned area of tests of controls and substantive test using sampling techniques as appropriate. Strengths and weaknesses’ should be denoted by using a “S” or “W” on each area applicable area of the flowchart and checklist of each assigned area. The summary status (“Ss” and “Ws”) will be listed in the bridge worksheet for SOX 404 Audit analysis. Bridge Worksheet for Sales and Collection Cycle – SOX 404 Audit Public companies typically rely heavily on proper internal controls to maintain...
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...Audit Program Design Part II Company: Apollo Shoe Company Audit Begins: January 19, 2010 Audit Ends: March 31, 2010 (Tentative) AUDIT SCOPE: Sales/revenue and collection cycle Payroll and personnel cycle Acquisition and payment cycle All Transactions, orders, and payments processed January 1, 2007 through December 31, 2007 AUDIT OBJECTIVES: • To determine internal control compliance to sub objectives for payroll and personnel cycle, sales/revenue and collection cycle, and the acquisition and payment cycle. • To obtain control evidence and documentation about the existence, accuracy, classification, timing and completeness of recorded acquisition transactions. CRITERIA: Statement on Auditing Standards (SAS) No. 99 – Fraud Auditing Standards AUDITOR ASSIGNMENTS: John Butler – Sales and Collection David Sargent – Payroll and Personnel Perry Boydstun – Acquisition and Payment Cycle METHODOLOGY: Each auditor will perform their assigned area of tests of controls and substantive test using sampling techniques as appropriate. Strengths and weaknesses’ should be denoted by using a “S” or “W” on each area applicable area of the flowchart and checklist of each assigned area. The summary status (“Ss” and “Ws”) will be listed in the bridge worksheet for SOX 404 Audit analysis. Bridge Worksheet for Sales and Collection Cycle – SOX 404 Audit Public companies typically rely heavily on proper internal controls to maintain an effective sales...
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...Audit Program Design Part II ACC/546 May 2, 2011 Audit Program Design Part II The audit of Apollo Shoes, Inc. requires a design of steps to develop audit objectives to plan the audit. The financial statements are divided into cycles to better manage the audit and disperse to staff within the firm. The following cycle’s sales and collection, payroll and personnel and acquisition and payment were developed to design test of controls, substantive tests of transactions and analytical procedures. Anderson, Olds, and Watershed, LLP will be designing test of controls, substantive tests of transactions and analytical procedures for Apollo. This will allow our firm to better understand the internal controls within their company along with making sure the company is in compliance with the requirements of the Sarbanes-Oxley Act of 2002 and generally accepted accounting principles. Sales & Collection cycle Sales and collections audits test financial information relating to the sales of goods and services to consumers and the payment collection for these sales. In Apollo shoes audit AOW will involve the decisions and processes necessary for the transfer of the ownership of goods and services to customers after they are made available for sale; it begins with a request by a customer and ends with the conversion of material on service into an account receivable and ultimately into cash. There are several functions include in this cycle such as processing customer...
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... Philippine Auditing Practice Statement 1009 COMPUTER-ASSISTED AUDIT TECHNIQUES PAPS 1009 PHILIPPINE AUDITING PRACTICE STATEMENT 1009 COMPUTER-ASSISTED AUDIT TECHNIQUES CONTENTS Paragraphs Introduction Description of Computer Assisted Audit Techniques (CAATs) Considerations in the Use of CAATs Using CAATs Using CAATs in Small Entity IT Environments Effective Date Acknowledgment 1-3 4-6 7-16 17-25 26 27 28-29 The Auditing Standards and Practices Council (ASPC) issues Philippine Auditing Practices Statements (PAPS or Statements) to provide practical assistance to auditors in implementing the Philippine Standards on Auditing (PSAs) or to promote good practice. Statements do not have the authority of PSAs. This Statement does not establish any new basic principles or essential procedures; its purpose is to assist auditors, and the development of good practice, by providing guidance on the application of the PSAs regarding the use of Computer Assisted Audit Techniques as an audit tool. This Statement applies to all uses of CAATs involving a computer of any type or size. The auditor exercises professional judgment to determine the extent to which any of the audit procedures described in this Statement may be appropriate in the light of the requirements of the PSAs and the entity’s particular circumstances. PAPS 1009 Introduction 1. The overall objectives and scope of an audit do not change when an audit is conducted in a computer information technology (IT) environment...
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...decided because of the reduction in cost to acquire the program compared to a customized system. Also the training on and maintenance of the program will be included in the purchase price. The next step would be to determine what type of audit that would best fit the processes that are targeted. There are four types of audits. There is the attestation audit, which according to "KHSA Karren, Hendrix, Stagg, Allen" (2012), "are assurance engagements that require procedures to be applied to financial reporting processes and controls, but do not necessarily require an audit. Then there are findings and recommendations that are used when implementing a system. The next type of audit is the SAS 70 audit. According to "NBD Accountants Consultants" (2008), “It is an auditing standard put forth by the AICPA that is utilized by auditors for examining internal controls in service organizations. Service organizations are the host of companies that provide critical, third-party outsourcing services to other companies.” The final type of audit is the Statement on Auditing Standards (SAS) 94: The effect of information technology on the Auditor’s consideration of internal control in a Financial Statement Audit. The SAS 94 audit provides guidance to auditors concerning the influence of information technology on internal control, and on the auditor's understanding of internal control and assessment of control risk. The auditor is required to design procedures to understand the...
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... |School of Business/Graduate | | |ACC/546 Version 2 | | |Auditing | Copyright © 2009, 2008, 2007 by University of Phoenix. All rights reserved. Course Description In this course, students focus on the auditing practice performed by public accountants. Topics include the CPA profession and the auditor’s role, planning the audit, audit reporting and required communications, evaluating internal controls, audit programs for current assets and liabilities, and audit programs for other business cycles. Policies Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents: • University policies: You must be logged into the student website to view this document. • Instructor policies: This document is posted in the Course Materials forum. University policies are subject to change. Be sure to read the policies at the beginning of each class. Policies may be slightly different depending on the modality in which you attend class. If you have recently changed modalities, read the policies governing your current class modality. Course Materials ...
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...CHAPTER 6 Audit Planning, Understanding the Client, Assessing Risks and Responding Brief Topical Outline A. The audit process 1. Obtaining clients (PowerPoint 6-2) — Submit a proposal — communicate with predecessor auditors 2. Overall process (PowerPoint 6-3,4) B. Audit planning (PowerPoint 6-5) 1. Establish an understanding with client, ordinarily through use of an engagement letter (PowerPoints 6-6, and 6-7) 2. Overall on audit planning (PowerPoint 6-8) C. Obtain an understanding of the client and its environment 1. Risk assessment procedures (PowerPoint 6-9) 2. Business risk approach to the audit (PowerPoint 6-10 through 6-16) 3. Materiality D. Assess the risks of material misstatement and design further audit procedures 1. Overall approach (PowerPoint 6-17) 2. Assessing fraud risks (PowerPoints 6-18 through 6-21) 3 Design further audit procedures (PowerPoints 6-22 and 6-23) E. Organization of the audit program 1. The systems portion 2. The substantive test portion (PowerPoint 6-24) 3. Analyzing transactions affecting accounts (PowerPoint 6-25) 4. Indirect verification of income statement accounts (PowerPoint 6-26) 5. Assertions, objectives and procedures (PowerPoint 6-27) — Management assertions — Direction of audit testing (PowerPoint 6-28) — Substantive objectives for the audit of asset accounts ...
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...Technical Audit A Technical audit may be defined as "A systematic, independent process for obtaining evidence and evaluating this objectively to determine the extent to which needs or expectations are fulfilled." The practice of promoting quality of Public infrastructure and technical audit is new approach in Nepal but the importance of quality & technology has become the concerned subject matter since 1970 AD only. Adequate concentration is never given towards the quality of development activities and better services. Asian Development Bank (ADB) & Administrative Improvement Commission has addressed towards the quality maintenance and optimum utilization of expenses for better Public infrastructure in 1990. As a result in 1992 A.D. Chief Office of technical audit was establish within Ministry of Physical Planning and development (former Ministry of Transportation and Development) In the process of improving the capacity and procedure of technical audits Ministry of Physical Planning and development has given the speed but the main role and function was still passive. In 2058 B.S., the arrangement was made for establishing the Technical audit Division under the first amendment of economic administration Act. RMDP under DTAC project was implemented in 31 st July, 2003,working for preparation of TA manual for Road, Drinking water and Sanitation. It was funded by World Bank. It has become a great challenge to maintain the quality of Public Infrastructure for the...
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...dressings. Central venous catheters are routinely used in the critical care setting; therefore, posing an increased risk of infection. Furthermore, increases in morbidity, mortality, and cost are a result of blood stream infections from central lines (Warren et al., 2004). Research Problem Blood stream infections increase morbidity, mortality, cost, length of stay; furthermore, the literature shows that many of these infections are preventable. A staff education has proven to be cost effective and proficient in decreasing blood stream infections (Coopersmith, et al., 2004). Warren et al. (2004) states, “The Centers for Disease Control (CDC) recommends the utilization of health-care worker education is an important element in programs aimed at the prevention of hospital-acquired infections” (p.1613). A review of the literature explain nurse bedside behavior after education on hand washing and best practice with central venous catheters can decrease blood stream infections. Purpose The purpose of the research was to create an educational curriculum for nurses to practice best practice while caring for patients with central venous catheters. The purpose for the education is to decrease blood stream infections by changing the bedside nurse’s behavior to follow best practice...
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