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Standard Procedures Cut off Accuracy Completeness Occurrence Existence Right & Obligation Valuation

Non-current Assets - Agree carrying  Valid title  Correct carrying


‘CERV’ amount of SOFP to  Recorded assets exist  Possess risk and amount
➢ misappropriation of  Ensure all recorded
disclosure notes at reporting date rewards associated  dep & revaluation is
assets - Recast amount in the with NCA appropriate
➢ unauthorized disclosure notes - Take sample of assets  Exists/ in use/ good/ Land: inspect title Revaluation
additions/ disposal physically exist & serial number deeds/ certificates
- Obtain explanation
for difference in GBV, inspect to NCA Depreciation
- Take sample in NCA Vehicles: inspect
acc. dep. NBV registers
registers & inspect to doc(insurance, road
Opening Balance
- Review Repairs and physical NCA (high tax, car loan) under
Maintenance Exp. value & additions) client name
Additions
Obtain from bankers
Other PPE: invoice Disposal
Inventories - Agree carrying Audit objective  all stock identify for How to get external  Stock recorded  Responsible for all  Value recorded
‘CCERV’ amount in SOFP to  Record in correct attend stock take: valuation are confirmation? represented by actual risks & entitle all appropriately based on
period
➢ material amount inventory listing Completeness appropriately recorded
1. Send letter request physical stock rewards standard
➢ Subjective area Existence
- Recast the listing - Obtain sample of pre- - Take sample of confirmation from 3rd - Attend stock take - Confirm inventory IAS2: Inventories
Valuation
➢ Impact on IS&SOFP (post) year end GRN stocks PHYSICALLY in party warehouse held AT (FOR) 3rd valued lower of COST
- Take sample from
ensure inventory are the warehouse, inspect 2. Attend inventory party in (not) included & NRV
➢ Physical control of 1. Planning inventory record,
inventory is low (not) included in to inventory records. count at 3rd party
- gain knowledge inspect to warehouse Cost: purchase invoice
(multiple location) record warehouse, review
- assess key factor - consignment stock NRV: Selling Price (-)
(consignment stock) - Obtain sample of - plan procedures physically inspect / controls Selling Exp. >> estimate
post-(pre) year end inspect confirmation 3. Inspect warehouse
2. Attend Allowance
GDN ensure inventory from 3rd party auditor report over
are (not) included in 3. After stock take (quality& quantity) Disclosure
inventory control
record
Receivables - Agree carrying  Sales record in Receivable  Ensure all recorded (a) Positive  Recorded receivables  Client entitled right to  Correct carrying
‘CCERV’ amount in SOFP to correct period Confirmation Circularization (Good) exist at reporting date collect recorded amount amount
➢ risk of fake sales individual of
- Obtain sample of - client send letter to Take a sample of GDN - Obtain direct - Perform receivable - Review loan - Discuss with
➢ risk of financial receivable listing &
pre-(post) year end receivables and sales invoices confirmation circularization agreement management on
manipulation receivable control
invoice ensure sales (letter draft by auditor) (Physical), inspect to - letter send to provision for doubtful
account - Follow up all balance - Review minutes of
are (not) included in sales & receivables customer ask them to debts
- client reply with disagreement and non- meeting on evidence of
- Recast 2 a/c record listing reply whether agree
balance amount to replies factoring receivables - Compare % with
with the balance on the
- Perform analytical auditor (prove existence) (selling the right) industry / past year
letter (higher response - Review after date
procedures, compare (on sampling basis) rate) cash receipt (bank - Review the
sales return to sales Send to: statement/ cash book) correspondence with
Long outstanding (b) Negative [ensure no fake customer] customers & solicitors
Nil Account Circularization (Bad) (chase for payment)
Bad debt - Inquire for long
- customer only outstanding receivables - Examine large
Material Balance
respond when balance customer, compare
a/c Settle on date exam - Inspect document
are not agreed(lower with last year
response rate) (invoice, GDN)
If disagree with - Inspect ageing
balances : cash in - should not solely document, discuss
transit / dispute/ mis- relied on this , search
postings for other evidence
If din reply: send - use on good control/
more letter / telephone immaterial/ not
/ change to negative expected to be wrong
Standard Procedures Cut off Accuracy Completeness Occurrence Existence Right & Obligation Valuation
Payable - Agree carrying - Select sample of Supplier Statement - Take a sample of Circularization - Take a sample of - Take a sample of
‘CCER’ amount in SOFP to GRN around the YE, - External confirmation GRN and supplier is performed when purchase & payables account, trace to
No assertion of V individual of payable ensure BF YE included - Prove CCER invoices (Physical), supplier statement is listing, inspect to purchase order /
because no allowance listing & payable / AF YE excluded inspect to purchase & unavailable GRN, supplier invoice invoices
However,
for doubtful debts control account payables listing
- SS unavailable - Take sample of
- Recast 2 a/c - Photocopy SS - no - Take sample of supplies account, trace
authentic supplier statement, to supplier statement
- Suspect client fraud inspect to accounts - Review after date
with supplier
payment
-Weak internal control

Valuation of PPE
Revaluation Deprecation Opening Balance Additions Disposal
- Obtain valuation certificate - Review for its reasonableness - Correct to last year balance - Obtain list of additions, agree to NCA - Obtain list of additions, agree to NCA
& review for its reasonableness (useful life, residual value) register register
- Confirm revalue regularly - Reperform calculation - Inspect invoice - Obtain doc, inspect transfer title, price,
- Recast revaluation surplus agree to -Discuss with management if fluctuates - Review the capitalization of date, payment
revaluation reserve - Review profit& loss of disposal & expenditure (distinct with revenue exp) - Recast profit / loss on disposal
- Take sample of revalued assets, recast assess the depreciation policy - Review the proceeds is at market price
the charge of depreiation based on Ensure profilt/ loss is near to nil
revalued amount

Valuation of Inventory
Cost Net Realisable Value Disclosure
Purchase price Manufactured Good - Inquire management about slowing moving stock - Accounting policies
- Obtain sample of inventory and inspect to its purchase - Obtain sample of manufactured item and inspect to its should be written down - Amount recorded at NRV
invoice cost sheet - Attend stock count to identify slow moving stock
( raw material / labour cost / allocation of OH) - Amount write off as expenses
- Ensure appropriate basis of valuation - Examine selling price after YE, ascertain goods
(FIFO, LIFO, WACO) - Discuss with management on basis should be written down
- Review the variance statement

Valuation of Bank
Bank confirmation letter Bank statement Other Evidence
- External confirmation (reliable) - Perform cut off test to payment & receipt (no window dressing)\ - Overdraft
- Cover CERV - Trace unpresented/ uncredited cheque in bank reconciliation - obtain - Company assets held as security
How? explain - Share certificates
1. Draft bank confirmation letter - Inquiry items on bank statement
2. Obtain authorization from client - Personal guarantees connection with company loan
3. Send letter to bank -Inspect unusual item in cash book - Interest charge not yet recorded
4. Bank reply directly to auditor - Recast bank reconciliation
Valuation of cash ( MATERIAL - attend cash count)
Planning During cash count After cash count
- Record time/location/ audit staff/ client staff to count - count cash in front of official responsible - Reconcile any different between record and count
- Ensure cash book are up-to-date - Enquire into I owe you cash (IOUs) - Ensure IOUs have been reimbursed
- Agree cash balance to SOFP - Agree to SOFP

Valuation of Provision - consistent with IAS


Standard Procedures Provision for legal claim Provision for doubtful debts Provision for warranty
- Obtain all provision included in account - Inspect the correspondence client and customer - Inspect the receivable ageing analysis - Compare to industry, past year data
- Obtain all contingencies disclosed - Discuss with management (how they view) - Discuss with management
- Obtain detailed analysis ( Provision account) - Inspect minutes of meeting
- Obtain a written management representation - Obtain confirmation from solicitor
confirming view on provision