Lecture 15 Revision

1. Lecture 15Revision

2. Topics for revision • Internal control • Audit planning and audit program • Sales and collection cycle I & II • Acquisition and payment cycle • Other cycles • Completion of the audit

3. Internal control • Internal control • Definition • Limitations of internal control • Objectives of designing effective internal control • Components of internal controls • Obtaining understanding of internal control • Assessment of control risk • Tests of controls

4. Audit planning & audit program • Types of tests • Types of evidence • Audit program • Summary of audit process

5. Audit of sales & collection cycle I • Sales and cash receipts transactions • Classes of transactions and accounts • Business functions, documents & records • Understanding internal control • Design and perform tests of control • Design and perform substantive tests of transactions

6. Audit of sales & collection cycle II • Substantive tests of account balances • Methodology for designing substantive tests • Design & perform analytical procedures • Design & perform tests of details of balances for A/R • Confirmation of A/R

7. Acquisition & payment cycle I • Acquisition & cash payments transactions • Classes of transactions and accounts • Business functions, documents & records • Understanding internal control • Design and perform tests of control • Design and perform substantive tests of transactions and analytical procedures

8. Acquisition & payment cycle II • Substantive tests of account balances • Design and perform tests of details of balance for A/P • Out- of- period liability test • Cut-off tests

9. Inventory & warehousing cycle • Business functions, documents & records • Audit of cost accounting • Analytical procedures • Physical observation of inventory • Audit of pricing and compilation

10. 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

11. 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

12. Completion of the audit • Steps in completing the audit • Audit procedures for finding contingent liabilities • Audit procedures for subsequent events • Final evidence accumulation • Management representation letter • Evaluate results & communication

13. Final exam format • Closed book exam • Time allowed: 120 minutes • Structure: • MCQ: (30 marks) 20 questions • Question 1: (25 marks) Test students on types of audit cycles, audit objectives, types of evidence, types of tests

14. Final exam format • Structure (continued) • Question 2: (15 marks) Theory question covering audit of sales & transactions cycle, audit of A/R • Question 3 (15 marks) Test students on internal control • Question 4 (15marks) Theory question covering audit of acquisition & payment, other cycles and balances

15. Final exam format • Structure (continued) • Question 4 (15 marks) Exclude cost accounting in inventory, inventory pricing compilation, audit of prepaid expense, audit of accrued liabilities and capital acquisition & repayments.