ACC 521 Study Guide - Audit Evidence, Audit Risk, Internal Audit

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Evidence- gathering audit procedures: most auditors work involves designing and performing audit procedures to obtain sufficient audit evidence, then evaluating that evidence to draw reasonable conclusion on which to base the audit opinion. 1. auditor"s calculations or performance: recomputed amortization expense using declining balance. * recompute sales tax as percentage of total sales on invoices: observation, auditor"s observations, observe data entry process. *observe auditee"s inventory counting procedures: confirmation, statements by independent parties, obtain writing confirmation of ar balance and details from customers, enquiry, statements by auditee personnel. 5a. documents prepared by independent party: enquire about frequency of bank reconciliation procedures. 5a. read terms of lease agreement for lessee. 5b. review inventory variance analysis report prepared by production department: analysis, data interrelationships. 5c. auditor"s test counts of physical inventory quantities on hand at year- end: analyze monthly gross margin by product line. Recalculation: audit procedures that involve redoing calculations already performed by auditee personnel to determine if the result is accurate.

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