APPENDIX 3 AUDIT PROGRAMS

OVERVIEW Objective

To illu!trate t.e content! o/ 0or1 2ro ra3! /or t.e audit o/ tran!action! and 4alance!5

TRANSACTIONS Income statement BALANCES Balance sheet

PROPERT,6 P#ANT + E7UIPMENT

Transactions Existence and ownership Book val e !ropert" val ation Capital commitments Existence and ownership $al ation NR$ Interim co nt %IT !h"sical co nt Existence $al atio n Interim con#irmation C to## Loans !repa"ments Con#irmation s mmar" Bank &alances 'indow( dressin) Settin)( o## Cash &alances

SA#ES Tests o# detail

IN)ENTOR,

RECEI)A*#ES + PREPA,MENTS PURCHASES Tests o# detail

*AN- + CASH

8AGES + SA#ARIES Tests o# detail PA,A*#ES + ACCRUED EXPENSES Completeness Accr ed expenses Reservation o# title Settin)(o##

Accountancy Tuition Centre (International Holdin !" #td $%%&

'(3

SALES

HASTINGS & WARWICK

C#IENT 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 PERIOD 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5
AUDIT AREA CREDIT SALES

Sc.5 Re/5 PREPARED *, 5 5 5 5 5 5 5 5 5 5 5 5 RE)IE8ED *, 5 5 5 5 5 5 5 5 5 5 5 5

(Audit !enior in c.ar e"

DATE 5 5 5 5 5 5 5 DATE 5 5 5 5 5 5 5 DATE 5 5 5 5 5 5 5

RE)IE8ED *, 5 5 5 5 5 5 5 5 5 5 5 5
(Mana er"

The p rpose o# the a ditin) proced res set o t in this section o# the pro)ram is to o&tain reasona&le ass rance that credit sales are not materiall" nderstated* RELIANCE ON INTERNAL CONTROL PROCEDURES '5 8.ere 0e .a9e 2laced reliance on t.e client:! internal control 2rocedure!6 te!t t.at t.e control! on 0.ic. 0e are relyin .a9e 4een co32lied 0it.6 and record t.e detail! o/ !uc. te!t! in t.e 0or1in 2a2er!5

8or1 2er/or3ed 4y

Re/5 to !u22ortin 0or1in 2a2er

TESTS OF DETAIL Note+ 'here the maxim m val es o# items in an acco nt can &e determined #rom independent in#ormation or &" calc lation, se anal"tical proced res to red ce tests o# detail as #ar as possi&le* $5 Te!t /or o3i!!ion and ot.er under!tate3ent in t.e accountin record! o/ !ale! c.ar ed to account! recei9a4le6 4y !electin /ro3 a22ro2riate record! o/ 2otential !ale! tran!action!' and tracin t.e !elected ite3! t.rou . to t.e rele9ant inco3e account in t.e eneral led er6 a! /ollo0!; (A" Select /ro3 t.e 3o!t a22ro2riate record! t.e ite3! to 4e e<a3ined (!ee note 4elo0"5 Te!t /or co32letene!! o/ t.e!e record! 4y e<a3inin t.e !y!te3 /or 2re2arin and controllin !uc. record!6 4y te!tin t.e nu3erical !e=uence (i/ any" o/ t.e record!6 and>or 4y any ot.er 2rocedure! 0.ic. are a22ro2riate5 Note+ The records #rom which the sample is selected sho ld as #ar as possi&le satis#" the #ollowin) re- irements+ ./0 The records sho ld i# practica&le &e independent o# the sales recordin) s"stem* .10 The records sho ld &e complete in the sense that #or each sale that has &een made, there is a related item in the independent records* .20 The records sho ld i# practica&le &e s ch that the pro&a&ilit" o# selectin) a partic lar item is proportionate to the val e o# the potential sale* .30 The records sho ld ena&le the potential sales to &e identi#ied at the earliest possi&le sta)e in the recordin) process* (*" Co32are t.e record! !elected in 2rocedure (A" a4o9e 0it. t.e initial !ale! record!6 /or correct =uantitie!5 (C" C.ec1 t.e !ellin 2rice o/ t.e!e initial !ale! record! 0it. t.e rele9ant inde2endent record! (!uc. a! o//icial catalo ue!6 2rice li!t!6 etc5"6 and c.ec1 t.e e<ten!ion! and ca!t!5 (D" C.ec1 t.e )AT on !ale! !elected /or te!tin 6 and te!t t.e 2ro2er recordin o/ t.e!e ite3! in t.e )AT account in t.e eneral led er5 (E" Co32are t.e!e initial !ale! record! 0it. t.e inter3ediate and /inal record!6 te!tin t.e!e record! /or under!tate3ent o/ t.e ca!t!6 and /or under?!u33ari!ation o/ t.e !ale! inco3e5

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E cu!to3er!: order!