Audit Program Design Essay

923 words - 4 pages

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 ...view middle of the document...

Tests of controls
i. Obtain shipping records
ii. Obtain revenue records for shipping
iii. Obtain records for costs associated with the shipping process
b. Substantive tests of transactions
i. Sample the shipping records to ensure correct recording
ii. Sample the revenue records to ensure correct recording
iii. Sample the cost records to ensure correct recording
c. Analytical procedures
i. Compare results to prior years to ensure that the data matches up
ii. Determine if there are any risks
4. Physically observe inventory
a. Tests of control
i. Obtain the inventory lists
ii. Obtain what inventory has been used
b. Substantive tests if transactions
i. Sample the inventory list to ensure that the inventory is present
ii. Make sure that the inventory used is listed
c. Analytical procedures
i. Compare results to prior years to ensure that the data matches up
ii. Determine if there are any risks
5. Price and compile inventory
a. Tests of controls
i. Obtain pricing list
ii. Obtain inventory list
b. Substantive tests of transactions
i. Make sure that the pricing list is what is being used for the actual prices
ii. Make sure that the inventory list has correct price listed
iii. Make sure that inventory is counted correctly
c. Analytical procedures
i. Compare results to prior years to ensure that the data matches up
ii. Determine if there are any risks
Cash Cycle
This cycle will deal with the accounts that have cash holdings or where they pay their bills from. This cycle is included in all of the cycles except inventory and warehouse cycle. This will be the overview on how the audit of this cycle will be laid out.
1. General cash accounts
a. Tests of controls
i. Obtain balance sheets
ii. Gain access to...

Other Papers Like Audit Program Design

The Effects of Longterm Auditor-Client Relationship on Audit Quality

2445 words - 10 pages the activities and/or decisions opted, in reference to records, to ensure their applicability to meet the required criterion or characteristics with in a system, program, process etc (Mills, 1989). Audit quality is positively associated to the integrity of a firms’ financial report and negatively associated with the firmspecific information risk and its cost of equity capital. The quality of the firms’ disclosed information is enhanced by the audit

Company Analysis: Twd

2091 words - 9 pages mitigate the risk (Louwers, p. 69). This is why it is essential that the auditor know the business before starting their audit process. The SAS 99 presents an extensive range of audit responsibilities. The standard requires auditors to understand fraud; assess fraud risks; design audits to provide reasonable assurance of detecting fraud that could have a material effect on financial statements, and report findings (Louwers, p. 70). Risks

Risk Management Planning

1693 words - 7 pages studying the best practices wherever you find them, and adapting what you learn to your circumstances. When designing an internal audit function, strategy must drive tactics, not the inverse. Too often, the start-up is in response to an immediate tactical need. In a rush to implement a response, key strategic issues can be overlooked. The result can be a tactical internal audit function in search of a strategy. To help design and implement a

Kudler's Fine Foods

1130 words - 5 pages 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

Smacky Dog Food Inc

1908 words - 8 pages based on the auditor’s judgment. 5. Fifth develop an overall audit plan and audit program. The audit plan and program aims to achieve the audit risk objectives of the audit team and to provide reasonable assurance and basis for the audit report and opinion. Q3: Discuss the 4 stages of the audit and the major activities performed by the auditor in each phase. Give an example of how each of these specifically applies to the Smackey Dog Food

Audit Process Letter

1697 words - 7 pages the client (Arens, Elder, & Beasley, 2012). There are eight major parts of audit planning, seven of which are intended to help the auditor develop an effective and efficient overall audit plan and program, which is the eighth part (Arens, Elder, & Beasley, 2012). Accept Client & Perform Initial Audit Planning: The first part of planning an audit is accepting the client and performing initial planning activities. These activities

Ten Steps in Auditing

1981 words - 8 pages duties will be assigned and a time budget will be put into place. The audit plan will focus on procedures that detect material misstatements so that valuable time will not be wasted searching for immaterial misstatements that cannot affect the report. Auditors will write an audit program that lists specific audit procedures to be done to collect sufficient competent evidence. This can be a “canned” program, but every audit should be adjusted to be

Effect of Marketing Audit on Organisational Performance in Selected Nigerian Fast Food

2363 words - 10 pages wants are moving targets, and marketing programs require testing and retesting to find the most profitable formula. A marketing audit is the way to achieve success by providing an interim report card to help the company and their staffs tap into inherent resource. 3.0 Research Methodology Research Design According to Asika (1991), it is practically impossible to study all the subject or items in a population. Therefore, the survey

Hotel Fragnance

4412 words - 18 pages . TILl:!s,in~.frn assurance engagement, "The internal audit activity .e~tevaluate the design, implementation, and effectiveness of e qrt€Janization's ethics-related objectives, programs, and tivrties': (Imp!. Std. 2110.A1).. .' Answer (A) is incorrect. Identifying significant exposures to risk most directly relates to risk management rather than to governance. Answer (8) is incorrect. Evaluating the effectiveness of the risk-management system most

Smackey Project

1834 words - 8 pages design an audit. Keller CPAs use information obtained from risk assessment procedures related to Smackey acceptance and initial planning, understanding the Smackey s business and industry, assessing the Smackey s business risks, and performing preliminary analytical procedures primarily to assess inherent risk and acceptable audit risk. Keller CPAs use assessments of materiality, acceptable audit risk, inherent risk, control risk, and any identified

Dvanced External Auditing [Au2] Examination Blueprint 2013/2014

7165 words - 29 pages Business risk Examine the impact of business risk-based auditing on the audit approach. Understand the relationship between client business risk and auditor engagement risk, and understand how information technology affects client business risk. Document knowledge of the client’s business, including information systems, and develop an audit plan for the audit of enterprise risk management. Design the audit process to include effective quality

Related Essays

Audit Design Program Iii Essay

1202 words - 5 pages 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

Audit Program Design Part Ii Essay

1258 words - 6 pages AUDIT PROGRAM DESIGN – PART II Audit Program Design – Part II Matthew Montag, Dominique Payne, Benjamin Powers, and Shynelle Cade ACC/546 March 26, 2012 Scott Phillips March 26, 2012 Larry Lancaster Chairman, President and CEO Apollo Shoes Inc., 123 Shoestring Lane Shoetown, ME 00001 Dear Mr. Lancaster: Anderson, Olds, and Watershed CPAs want to again thank the management of Apollo Shoes Inc

Impact Of Ict On Accounting Practice In Nigeria

1690 words - 7 pages company's management. It may also be done on a section, division, department, or on the entire business itself. An audit strategy can refer to a design to carry out an internal audit, or to a plan designed to handle an audit by an outside agency such as a tax bureau. In both cases, proper planning, research, and organization can contribute to a faster, more efficient process. There are many different theories on how to approach an audit strategy; for

Audit Process Letter Essay

1402 words - 6 pages , including engagement staffing and the need for outside specialists. The audit program will establish the work needed to gather evidence to satisfy the audit objectives and provide information to develop audit findings and an audit report. Field work on the audit will not begin until the audit program has been approved by audit management. My goal includes planning, assessing risk, and performing engagement procedures to produce the optimum