BUS 426 Chapter Notes - Chapter 15: Audit Risk, Audit Evidence, Analytical Review

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 426
• Professor: Michael Favere- Marchesi

Document Summary

Designing tests of details of balances for a/r. Methodology for designing tests of details of balances. Evidence planning spreadsheet: a working paper used to help the auditor decide whether planned audit evidence for tests of details of balances should be low, medium or high for each balance- related audit objective (page 229) Methodology for designing tests of details of balances steps: 1. Set materiality, assess audit risk and inherent risk and conduct planning analytical review: 2. Assess control risk for the sales and collection cycle. Occurrence in sales affect the existence of the receivable. Occurrence in cash receipts affect the completeness of the receivable. Completeness in cash receipts affect the existence of the receivable: 3. Identify assertions where substantive testing may be insufficient. Targets testing that are based upon risk of materiality misstatement. Increase testing where there are significant risks of misstatement: 4. Design and perform tests of controls: 5. Design tests of details to satisfy balance-related objectives.