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General Verification Procedures - Audit Process
1. Get or prepare a schedule for each and every class of liability. Usually this would indicate the makeup of the liability along with the opening balance, any changes whether any, and the closing balance.2. Cut off: usually the auditor would verify cut-offs by ensuring such where a service has been received by the year end, the equivalent liability has been set up. And where a liability has been set up, the equivalent benefit has been obtained.3. Review for reasonableness: the auditor must consider reasonableness of a liability ensuring that there are no circumstances which may put him upon query.4. Review of internal controls: the auditor should verify, test and evaluate the internal control procedures surrounding that liability.5. Previous year's liability: consider the liabilities at the before year end and see whether they have been properly empty or are still appropriate bearing in mind the statute of restriction.6. Conditions and Terms: the auditor should review all conditions and terms agreed whenever accepting a liability among his client and the creditor. He should then ensure about the agreement is being complied along with.7. Authorization: authority for all liabilities should be sought. These can be discovered in the company's minutes, director's minutes and for some items the authority is in the Articles and Memorandum.8. Description and Disclosure: the auditor must ensure about the description in the accounts is adequate.9. Inspection of Documents: the auditor has to study all relevant documents. In the case of liabilities, these involve invoices, debenture deeds, correspondence, loan agreements, purchase orders etc.10. Securities: most liabilities are safe in one way or other by either fixed or floating charges. The auditor should ask into this and enquire such where essential, they have been registered.11. Confirmation: the creation of any liability should be vouched and external verification obtained.12. Accounting policies: the auditor needs to confirm himself that suitable acceptable accounting policies are consistently and adopted applied.13. Related evidence: review of connected evidence can assist in confirming liabilities. For example existence of loans can be confirmed through interest payments.14. Materiality: the materiality of the issue has to be taken into confirmation.15. Review of post-balance sheet events: this is a very significant area and has been covered somewhere else.
Matters of Audit Process Another matter to be covered as: 1. Accounting policies: these should be uniform all over the group and should be properly disclosed. 2. Consoli
QUESTION: (a) The auditor should get relevant and reliable audit evidence sufficient to enable him to draw reasonable conclusions therefrom: (i) What do you understand by
Research and development Panorama Ltd manufactures and distributes a wide range of general pharmaceutical products. Selected audited data for the reporting period ended 31 Dec
Types of audits As far we have tended to think in state of the audit of limited companies, and certainly, the emphasis during this text will be on that companies incorporated
For each of the following independent situations, state whether you agree or disagree, and briefly explain your answer. (a) Materiality is used only at the planning stage of the
Current Audit File The current audit file might include inter alia: a) A copy of the audited financial statements and any report prepared as a result of audit work carried out
Auditors use various tools to document their understanding of an entity's internal control system, including narrative descriptions, internal control questionnaires, and flowcharts
Please assist me with this internet research, Search the internet (e.g. a company's website or sec.gov and find an audit report for a company's audit of internal control over fi
How to vouch
Provide the data regarding all about auditing of Newspaper agencies
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