ACT 3900 Lecture Notes - Lecture 7: Current Liability, Trend Analysis, Financial Statement
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Substantive procedures are performed by the auditor to: gathe(cid:396) e(cid:448)ide(cid:374)(cid:272)e (cid:396)ega(cid:396)di(cid:374)g the u(cid:374)de(cid:396)l(cid:455)i(cid:374)g asse(cid:396)tio(cid:374)s (cid:894)c, e, a, v(cid:895) that a(cid:396)e e(cid:373)(cid:271)edded i(cid:374) the a(cid:272)(cid:272)ou(cid:374)t balances and underlying classes of transactions; and, dete(cid:272)t (cid:373)ate(cid:396)ial misstatements. There are a number of possible techniques that can be used to perform the analytical procedures. The objective is to select the most appropriate technique to provide the intended levels of assurance and precision. Techniques include: ratio a(cid:374)al(cid:455)sis, t(cid:396)e(cid:374)d a(cid:374)al(cid:455)sis, b(cid:396)eak-even analysis, patte(cid:396)(cid:374) a(cid:374)al(cid:455)sis; a(cid:374)d, reg(cid:396)essio(cid:374) a(cid:374)al(cid:455)sis. Subsequent events occur after the date of the financial statements (the period-end date). Other key dates in the preparation, audit and release of financial statements are outlined in the following exhibit. Perform audit procedures to identify any subsequent events that would require adjustment of, or disclosure in, the financial statements. This would include: u(cid:374)de(cid:396)sta(cid:374)di(cid:374)g (cid:373)a(cid:374)age(cid:373)e(cid:374)t p(cid:396)o(cid:272)edu(cid:396)es (cid:894)if a(cid:374)(cid:455)(cid:895) to ide(cid:374)tif(cid:455) su(cid:271)se(cid:395)ue(cid:374)t e(cid:448)e(cid:374)ts, maki(cid:374)g i(cid:374)(cid:395)ui(cid:396)ies of (cid:373)a(cid:374)age(cid:373)e(cid:374)t (cid:894)a(cid:374)d those (cid:272)ha(cid:396)ged (cid:449)ith go(cid:448)e(cid:396)(cid:374)a(cid:374)(cid:272)e(cid:895) a(cid:271)out: