审计学一种整合方法15版英文教辅资源arens15_irm__9.pdf

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1、16-1 Chapter 16 Completing the Tests in the Sales and Collection Cycle:Accounts Receivable Chapter 16 is a key chapter because it builds on Chapters 14 and 15.It is also the first chapter where tests of details of balances are applied.The following are the topics we cover:Chapter opening vignette Me

2、thodology for designing tests of details of balances Designing tests of details of balances Confirmation of accounts receivable Developing tests of details audit program Review Chapter Opening Vignette “When More Isnt Better”This vignette makes one essential point:the quality of evidence is more imp

3、ortant than the quantity of evidence.In fact,low quality cannot be compensated for by high quantity.Confirmations are used to illustrate this point and can be discussed here.Other types of evidence can also be discussed:e.g.,internal vs.external documentation and the value of client representations.

4、Methodology for Designing Tests of Details of Balances(page 518)Before covering the methodology for designing tests of details of balances,we spend quite a bit of time reviewing key concepts.Examine the summary of the audit process in Figure 13-9(page 423)to review how tests of controls and substant

5、ive tests of transactions(Chapter 14)and audit sampling for tests of controls and substantive tests of transactions(Chapter 15)tie into Chapter 16.It is also useful to do the same with Figure 13-7(page 417).(See Figures 13-9 and 13-7)Review Figure 13-2(page 404)to describe the role of analytical pro

6、cedures and tests of details of balances in the audit of the sales and collection cycle.(See Figure 13-2)We cover the methodology for designing tests of details of balances by using Figure 16-1(page 519)as a frame of reference.We discuss the following steps:(See Figure 16-1;shown on Slides 16-6 to 1

7、6-8)16-2 Identify client business risks Set performance materiality and assess inherent risk Assess control risk We use Figure 16-2(page 521)to describe the relationship between transaction-related and balance-related audit objectives for the sales and collection cycle(See Figure 16-2;shown on Slide

8、s 16-9 to 16-10)Design and perform tests of controls and substantive test of transactions Design and perform analytical procedures Table 16-1(page 522)can be used to illustrate analytical procedures for the sales and collection cycle.We also use Tables 16-2 and 16-3(page 523)to highlight practical a

9、pplications of analytical procedures for the sales and collection cycle for Hillsburg Hardware.(See Table 16-1;shown on Slides 16-12 to 16-14)(See Tables 16-2 and 16-3;shown on Slides 16-15 and 16-16)Design tests of details of balances Designing Tests of Details of Balances(page 524)We ask students

10、to identify the physical starting point for performing tests of the year-end balance in accounts receivable and explain why the aged trial balance is the logical starting point.It is important that students know what an aged trial balance looks like(Figure 16-3,page 525),and where it comes from.OH-1

11、4-1 is useful to show where the aged trial balance fits into the accounting system.(See Figure 16-3)(See OH-14-1)The balance-related audit objectives first developed in Chapter 6 should be reviewed at this point.Our emphasis is on why there are objectives(types of misstatements),why they are differe

12、nt from transaction-related audit objectives,and how they are used.OH-16-1 summarizes balance-related audit objectives and OH-16-2 compares balance-related audit objectives to transaction-related audit objectives.(See OH-16-1 and OH-16-2)Next,we require students to close their books and go over the

13、balance-related audit objectives on OH-16-3.(See OH-16-3)We require students to do the following in class:1.Convert the general objectives to specific objectives for accounts in the sales and collection cycle.2.Identify procedures to satisfy the objectives.3.Identify factors that would affect the pr

14、ocedures,sample size,and items to select.16-3 Our experience is that they need a lot of guidance in doing this,and it is somewhat time-consuming,but productive.We believe that two objectives deserve special attention:Realizable value We refer students to the analysis of the allowance for uncollectib

15、le accounts in Figure 16-4(page 529).We first note that the analysis depends on an accurate aging,and note that the aged accounts receivable balances in Figure 16-4 come from the aged trial balance in Figure 16-3(page 525).We then ask students to describe how an auditor should assess the appropriate

16、 loss percentage to apply to each aged accounts receivable category.We emphasize the need to consider recent trends in establishing loss percentages.(See Figures 16-3 and 16-4)Cutoff Students in our classes have problems in this area.We emphasize cutoff for sales.We point out that cutoff misstatemen

17、ts are the most frequent type of misstatements that auditors will find.Problem 16-26 is a good one for this material.Often we make up our own example on OH-16-4.(See OH-16-4)Problems 16-23,16-24 and 16-25 are excellent reviews of accounts receivable balance-related audit objectives.Problem 16-27 is

18、useful to help students distinguish among tests of controls,substantive tests of transactions,analytical procedures,and tests of details of balances.Confirmation of Accounts Receivable(page 530)We find it sufficient to cover several Review Questions after the definition of confirmation is reviewed.(

19、See OH-16-5)16-10 Type of confirmations(positives versus negatives)16-11 Timing 16-12 Sample size 16-13 Email and oral responses and authentication 16-14 Confirming additional information Slides 16-24 to 16-30 also cover these concepts.Multiple Choice Question 16-21 and Problem 16-33(alternative pro

20、cedures)are also useful at this point.Problem 16-31 can be used to illustrate timing differences and other errors and differences that an auditor may need to resolve when using balance confirmations.Developing Tests of Details Audit Program(page 536)We use the Hillsburg Hardware Co.to illustrate how

21、 auditors develop detailed audit program steps for tests of details.Refer students especially to Table 16-4(page 538)and Table 16-5(page 539)and remind them:16-4 Figure 16-7(page 537)is useful for understanding the decision process that the in-charge auditor followed.(See Figure 16-7;shown on Slide

22、16-35)The procedures were developed from a unique set of facts(see Figure 16-7).If the facts change,the procedures are likely to change.The sample size and items to select are included in the audit program.They were decided on a judgment basis considering the relevant factors in the engagement.Notic

23、e that confirmation(Procedure 10 in Table 16-5)is used to satisfy multiple objectives.The procedures in Table 16-5 are those in Table 16-4(design format)converted to a performance format.We trace one or two procedures in class from Table 16-4 to Table 16-5 to make sure that students understand how t

24、his is done.The reasons for the differences between a design and a performance format should be emphasized.(See Tables 16-4 and 16-5)Review Any of Problems 16-23,16-24,16-25,or 16-27 are useful to review types of tests and balance-related audit objectives.Problem 16-32 is useful for identifying how

25、audit procedures should change in response to changes in audit circumstances.Case 16-34 is especially useful for identifying audit risks and summarizing the trade-off between tests of controls,substantive tests of transactions,analytical procedures,and tests of details of balances.Problem 16-36 can

26、be used to illustrate the performance of selected procedures using ACL.If you used the Pinnacle Manufacturing Case in earlier chapters,it is important that you finish it by using Case 16-35,which is the final part.CHAPTER 16 CROSS-REFERENCE OF LEARNING OBJECTIVES AND PROBLEM MATERIAL LEARNING OBJECT

27、IVES REVIEW QUESTIONS MULTIPLE CHOICE QUESTIONS DISCUSSION QUESTIONS AND PROBLEMS ACL PROBLEM AND CASES 16-1 Describe the methodology for designing tests of details of balances using the audit risk model.16-1,16-2,16-18 16-34 16-2 Design and perform analytical procedures for accounts in the sales an

28、d collection cycle.16-3 16-20 16-30 16-35 16-3 Design and perform tests of details of balances for accounts receivable.16-4,16-5,16-6,16-7,16-8,16-19 16-22 16-23,16-24,16-25,16-26,16-27,16-29,16-30,16-32 16-34,16-35,16-36 16-4 Obtain and evaluate accounts receivable confirmations.16-9,16-10,16-11,16

29、-12,16-13,16-14,16-15,16-16,16-17 16-21 16-28,16-29,16-31,16-33 16-34,16-35 16-5 Design audit procedures for the audit of accounts receivable,using an evidence planning worksheet as a guide.16-32 16-34 16-5 OH-16-1 BALANCE-RELATED AUDIT OBJECTIVES Details in the trial balance agree with related mast

30、er file amounts,foot to the total in the trial balance,and agree to the total in the general ledger.Amounts in the trial balance exist.Existing amounts are included in the trial balance.Amounts in the trial balance are accurate.Amounts in the trial balance are properly classified.Transactions near t

31、he balance sheet date are recorded in the proper period.Amounts in the trial balance are stated at realizable value.The client has rights to the assets in the trial balance.OH-16-2 COMPARISON OF TRANSACTION-RELATED AUDIT OBJECTIVES AND BALANCE-RELATED AUDIT OBJECTIVES TRANSACTION-RELATED AUDIT OBJEC

32、TIVES BALANCE-RELATED AUDIT OBJECTIVES Transactions are properly included in the master file and are correctly summarized.Details in the trial balance agree with related master file amounts,foot to the total in the trial balance,and agree to the total in the general ledger.Recorded transactions exis

33、t.Amounts in the trial balance exist.Existing transactions are recorded.Existing amounts are included in the trial balance.Transactions are accurately stated.Amounts in the trial balance are accurate.Transactions are properly classified.Amounts in the trial balance are properly classified.Transactio

34、ns are recorded on the correct dates.Transactions near the balance sheet date are recorded in the proper period.Not applicable.Amounts in the trial balance are stated at realizable value.Not applicable.The client has rights to assets in the trial balance.OH-16-3 BALANCE-RELATED AUDIT OBJECTIVES FOR

35、TESTS OF DETAILS OF BALANCES GENERAL BALANCE-RELATED AUDIT OBJECTIVES SPECIFIC BALANCE-RELATED AUDIT OBJECTIVES Detail tie-in Existence Completeness Accuracy Classification Cutoff Realizable value Rights OH-16-4 SALES CUTOFF Assume physical inventory was taken on 12-31-13.Client says that the last s

36、hipment made was on shipping document 11639.Shipping documents are issued in numerical sequence.Year-end field work starts 2-6-14.REQUIRED:A.What should the auditor do during the physical count to test for sales cutoff?B.What information should the auditor retain with respect to sales cutoff,and whe

37、re should it be kept between 12-31-13 and 2-6-14?C.On 2-6-14,what sales cutoff procedures should be performed?OH-16-5 CHARACTERISTICS OF A CONFIRMATION 1.Receipt 2.Written or electronic 3.Independent third party 4.Requested by auditor QUESTION:In what ways may positive or negative confirmations fail to meet these characteristics?