Chapter 13 – Overall Audit Plan and Audit Program

Overall Audit Planand Audit ProgramChapter 13©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 1Learning Objective 1Use the five types of audit teststo determine whether financialstatements are fairly stated.©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 2Types of Tests Risk assessment procedures Further audit procedures©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 3Further Audit Proceduresand the Audit Risk ModelAudit risk AAR= PDRmodel IR × CRSufficientSubstantive Tests ofTests of Analytical competenttests of details of+ + + =controls procedures evidencetransactions balances per GASSFurther audit procedures©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 4Risk Assessment ProceduresA major part of these procedures aredone to obtain an understandingof internal control.©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 5Role of All Audit Tests in the Sales and Collection CycleAccounts Cash inSales Receivable BankSales Cash receiptstransactions transactionsAudited by Audited byTOC, STOT, and AP TOC, STOT, and APEnding Endingbalance balanceAudited by AP and TDBTOC + STOT + AP + TDB= Sufficient appropriate evidence per GAAS©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 13 - 6Learning Objective 2Select the appropriate typesof audit tests.©2008 ...