Lecture 15 Revision. Topics for revision Internal control Audit planning and audit program Sales and collection cycle I & II Acquisition and payment cycle.

Lecture 15Revision

Topics for revision

• Internal control

• Audit planning and audit program

• Sales and collection cycle I & II

• Acquisition and payment cycle I & II

Internal control

• Internal control o Definitiono Limitations of internal controlo Objectives of designing effective internal

control

• Components of internal controls

• Obtaining understanding of internal control

• Assessment of control risk

• Tests of controls

Audit planning & audit program• Types of tests

• Types of evidence

• Audit program

• Summary of audit process

Audit of sales & collection cycle I• Sales and cash receipts transactions

o Classes of transactions and accounts

o Business functions, documents & records

o Understanding internal control

o Design and perform tests of control

o Design and perform substantive tests of

transactions

Audit of sales & collection cycle II• Substantive tests of account balances

o Methodology for designing substantive tests

o Design & perform analytical procedures

o Design & perform tests of details of

balances for A/R

o Confirmation of A/R

Acquisition & payment cycle I• Acquisition & cash payments transactions

o Classes of transactions and accountso Business functions, documents & recordso Understanding internal controlo Design and perform tests of controlo Design and perform substantive tests of

transactions and analytical procedures

Acquisition & payment cycle II• Substantive tests of account

balanceso Design and perform tests of details of

balance for A/P

o Out- of- period liability test

o Cut-off tests

Inventory & warehousing cycle• Business functions, documents &

records

• Audit of cost accounting

• Analytical procedures

• Physical observation of inventory

• Audit of pricing and compilation

Payroll & personnel cycle

• Business functions, documents & records

• Methodology for designing tests of control

and substantive tests of transactions

• Design & perform analytical procedures

• Design & perform tests of details of balances

Audit of transaction cycles & balances• Audit of general cash accounts

• Audit of PPE

• Audit of prepaid expenses

• Audit of accrued liabilities

• Audit of capital acquisition &

repayment

Final exam format

• Closed book exam

• Time allowed: 120 minutes

• Structure:

o MCQ: (30 marks) 20 questions

o Question 1: (20 marks) Test students on

types of audit cycles, audit objectives, types

of evidence, types of tests

Final exam format

• Structure (continued)o Question 2: (20 marks) Theory question

covering audit of sales & transactions cycle,

audit of A/Ro Question 3 (10 marks) Test students on

internal controlo Question 4 (20 marks) Theory question

covering audit of acquisition & payment, other

cycles and balances

Final exam format

• Structure (continued)

o Question 4 (15 marks) Exclude audit of

inventory, cost accounting, inventory pricing

compilation, audit of prepaid expense, audit

of accrued liabilities and capital acquisition

& repayments.

o Question 5 (10 marks) Analytical procedures