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Introduction to Actg 4P61

Introduction to Actg 4P61. Key Points. Management assertions Management assertions give rise to Audit Objectives What type of tests? Thus have N.B. For each audit objective there must be an audit test. Management Assertions. Transaction (Events) Occurrence Completeness Accuracy Cutoff

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Introduction to Actg 4P61

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  1. Introduction to Actg 4P61

  2. Key Points • Management assertions • Management assertions give rise to Audit Objectives • What type of tests? • Thus have • N.B. For each audit objective there must be an audit test

  3. Management Assertions • Transaction (Events) • Occurrence • Completeness • Accuracy • Cutoff • Classification

  4. Management Assertions • Balances • Existence • Rights and Obligations (Ownership) • Completeness • Valuation and Allocation

  5. Management Assertions • Presentation and Disclosure • Occurrence • Rights and Obligations (Ownership) • Completeness • Valuation and Allocation • Classification and Understandability

  6. Transaction-Related Audit Objectives • Specifically for transactions or events • There are five audit objectives for transactions • Occurrence • Completeness • Accuracy • Posting and summarization • Classification • Timing (Cutoff)

  7. Balance Related Audit Objectives • To see if a balance is fairly stated • Five objectives • Existence • Rights and Obligations (Ownership) • Completeness • Valuation • Allocation

  8. Presentation & Disclosure Related Audit Objectives • Used to examine financial statements • Seven objectives • Occurrence • Rights and Obligations (Ownership) • Completeness • Accuracy • Valuation • Classification • Understandability

  9. Examples • Asset Existence • The test • Inventory Completeness • The test • Sales Occurrence • The test • Sales timing • The test

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