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Lecture 15Revision
Topics for revision
• Internal control
• Audit planning and audit program
• Sales and collection cycle I & II
• Acquisition and payment cycle I & II
Internal control
• Internal control o Definitiono Limitations of internal controlo Objectives of designing effective internal
control
• Components of internal controls
• Obtaining understanding of internal control
• Assessment of control risk
• Tests of controls
Audit planning & audit program• Types of tests
• Types of evidence
• Audit program
• Summary of audit process
Audit of sales & collection cycle I• Sales and cash receipts transactions
o Classes of transactions and accounts
o Business functions, documents & records
o Understanding internal control
o Design and perform tests of control
o Design and perform substantive tests of
transactions
Audit of sales & collection cycle II• Substantive tests of account balances
o Methodology for designing substantive tests
o Design & perform analytical procedures
o Design & perform tests of details of
balances for A/R
o Confirmation of A/R
Acquisition & payment cycle I• Acquisition & cash payments transactions
o Classes of transactions and accountso Business functions, documents & recordso Understanding internal controlo Design and perform tests of controlo Design and perform substantive tests of
transactions and analytical procedures
Acquisition & payment cycle II• Substantive tests of account
balanceso Design and perform tests of details of
balance for A/P
o Out- of- period liability test
o Cut-off tests
Inventory & warehousing cycle• Business functions, documents &
records
• Audit of cost accounting
• Analytical procedures
• Physical observation of inventory
• Audit of pricing and compilation
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
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
Final exam format
• Closed book exam
• Time allowed: 120 minutes
• Structure:
o MCQ: (30 marks) 20 questions
o Question 1: (20 marks) Test students on
types of audit cycles, audit objectives, types
of evidence, types of tests
Final exam format
• Structure (continued)o Question 2: (20 marks) Theory question
covering audit of sales & transactions cycle,
audit of A/Ro Question 3 (10 marks) Test students on
internal controlo Question 4 (20 marks) Theory question
covering audit of acquisition & payment, other
cycles and balances
Final exam format
• Structure (continued)
o Question 4 (15 marks) Exclude audit of
inventory, cost accounting, inventory pricing
compilation, audit of prepaid expense, audit
of accrued liabilities and capital acquisition
& repayments.
o Question 5 (10 marks) Analytical procedures