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15 min

15 min. Cable Co, Inc planning the audit part three. RISK RISK RIS K. controls - Revenue Collection cycle no segregation of duties same person takes the orders sets up the accounts sends out the bills takes in the cash. Analytics & tests of details. substantive approach

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15 min

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Presentation Transcript

  1. 15 min Cable Co, Inc planning the audit part three

  2. RISK RISK RISK controls - Revenue Collection cycle • no segregation of duties • same person • takes the orders • sets up the accounts • sends out the bills • takes in the cash

  3. Analytics & tests of details substantive approach analytical procedures test of details (of account balances)

  4. analytical approach # of cable customers X monthly fee

  5. Cash Receipts = Accounts receivable @ 1/1/07 + Sales - Accounts receivable @ 12/31/07

  6. assertions validity completeness accurate recording I thinks these are Cooper’s terms for: existence / occurrence completeness valuation

  7. Change => risk • started using a service bureau for payroll • SA 70 report on the service provider • construction - make sure they capitalized: • labor • materials • interest • overhead and make sure depreciation is started on time

  8. communication with predecessor auditorrequired by GAAS • integrity of management • Fraud, illegal acts • Internal control related matters • disagreements about accounting principles or auditing procedures • reason for the change in auditors

  9. Bill talked with Jeff Lyons@ Baker and Lyons • no disagreements over accounting issues principles • you’ve already gone over last year’s workpapers

  10. analytics & tests of details • substantive tests • analytical procedures • test of details (of account balances)

  11. RISK RISK RISK rebuilds are the major focus

  12. management letter accumulate ideas to improve the client’s operations a way to add value to the audit

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