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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[21:42:26] Ansi: SESSION 10 - Audit Evidence : assertions and procedures
[21:42:39] Ansi: okay
[21:42:43] Ansi: to approacht his subject
[21:42:52] Ansi: well first things first
[21:42:58] Ansi: here is where your audit starts
[21:43:05] Ansi: the real work
[21:43:07] Ansi: and
[21:43:18] Ansi: if u look at past papers u'll see that this topic is examineda ll the time
[21:43:36] Ansi: at least in 1 qusetion or most often 2
[21:43:54] Ansi: so needless to say that it should be studied carefully
[21:44:20] Ansi: to get to the subject let's remember audit process first
[21:44:37] Ansi: what are the 3 main phases
[21:44:39] Ansi: in audit
[21:44:57] haroonarif: planning
[21:45:00] Ansi: yeap
[21:45:03] haroonarif: engagement process ?
[21:45:04] Ansi: that's number 1
[21:45:14] haroonarif: analysis
[21:45:16] haroonarif: report
[21:45:19] kurthamil: {Ansi} strategy
[21:45:24] Ansi: well could be said thsi way
[21:45:27] Ansi: but what i meant is
[21:45:29] Ansi: planning
[21:45:31] Ansi: interim
[21:45:32] Ansi: and final
[21:45:34] Ansi: audit
[21:45:37] kurthamil: ok
[21:45:55] sfoz: ok
[21:46:02] Ansi: when is interim audit being done?
[21:46:12] haroonarif: before year end
[21:46:20] Ansi: definately :)
[21:46:25] haroonarif: control testing etc
[21:46:31] Ansi: but from the name u can guess that it's closer to mid of year
[21:46:35] Ansi: though not obligatory
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[21:46:38] Ansi: july , august
[21:46:46] Ansi: right
[21:46:52] Ansi: that's when u do testing
[21:47:07] Ansi: why test of control is being done, what's the purpose?
[21:47:26] haroonarif: planning purposes
[21:47:31] kurthamil: to gather audit evidence
[21:47:34] sfoz: to get evidences
[21:47:46] haroonarif: risk assessment
[21:48:03] Ansi: well actually evidence is rather being gathered at final stage
[21:48:10] sfoz: lol
[21:48:11] Ansi: however again not obligatory :)
[21:48:30] Ansi: test of controls is being done to ensure that system of internal control functions properly
[21:48:35] Ansi: that u can actually rely on it
[21:48:39] haroonarif: yes
[21:48:45] Ansi: alright
[21:48:45] sfoz: yes
[21:49:03] Ansi: at the end of interim audit, auditor usually prepares management letter
[21:49:12] Ansi: and sends it to shareholders
[21:49:16] Ansi: what's the puropse of this letter
[21:49:25] Ansi: a bit of revision of last session :)
[21:49:25] haroonarif: weaknesses identified
[21:49:31] Ansi: yeap
[21:49:39] sfoz: to present their findings
[21:49:45] Ansi: it shows discovered weakenesses and deficiences
[21:49:46] Ansi: yea
[21:49:49] Ansi: alright and
[21:49:50] sfoz: and make recommendations
[21:49:53] Ansi: after year end
[21:49:56] Ansi: fianl audit is done
[21:50:06] Ansi: usually by that time FS should be prepared
[21:50:23] Ansi: what is being done during final audit?
[21:50:30] haroonarif: yeah auditor will give a couple of months for directors to prepare the accounts
[21:50:36] haroonarif: substantive procedures..
[21:50:45] Ansi: yea
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[21:50:53] Ansi: it's more direct testing
[21:51:00] Ansi: of balances
[21:51:08] Ansi: and that's when
[21:51:18] Ansi: u as auditor actually gather evidence
[21:51:23] Ansi: to supprot assertions of the FS
[21:51:29] Ansi: and that brings us to today's topic
[21:51:41] Ansi: so what is an audit evidence
[21:52:16] haroonarif: documentation
[21:52:29] kurthamil: {Ansi} audit evidence are particular findings in an audit engagement.
[21:52:34] sfoz: on which is based audit opinion
[21:52:44] Ansi: yes
[21:52:56] Ansi: those are documentary proofs of their findings
[21:53:12] kurthamil: {Ansi} am i right
[21:53:34] Ansi: {kurthamil} documentary proved findings
[21:53:50] sfoz: lol
[21:53:56] Ansi: to be able to suppor those
[21:54:16] Ansi: to be useful evidence should pocess 3 main characteristics
[21:54:18] Ansi: what are those
[21:54:32] sfoz: sufficiency
[21:54:33] haroonarif: sufficient and appropriate
[21:54:39] sfoz: appropriateness
[21:54:45] Ansi: appropriateness is not really in the list
[21:54:56] Ansi: what's a better word?
[21:54:58] sfoz: completeness
[21:55:04] sfoz: ?
[21:55:04] Ansi: sufficient is correct
[21:55:34] Ansi: i'm not talking about assertions now
[21:55:34] sfoz: free from bias
[21:55:38] Ansi: i'm talking about evidence it self
[21:55:44] Ansi: 3 main characteristics are
[21:55:54] Ansi: it should be sufficient as u said
[21:55:57] Ansi: relevant
[21:55:59] Ansi: and reliable
[21:56:05] haroonarif: ok
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[21:56:09] sfoz: ok
[21:56:10] tud21: r we discussing Aduit evidence today?
[21:56:15] Ansi: yes tud
[21:56:18] tud21: auit*
[21:56:21] tud21: ok
[21:56:23] Ansi: :)
[21:56:26] Ansi: join us
[21:56:31] Ansi: sufficiency
[21:56:45] Ansi: here u comet o one very important mnemonic
[21:57:08] Ansi: that shows when evidence is sufficient
[21:57:20] Ansi: or if u don't know mnemonic
[21:57:23] Ansi: then just try to describe
[21:57:42] Ansi: to prove that evidence is sufficient u should prove what ?:)
[21:58:02] sfoz: completeness?
[21:58:08] Ansi: no
[21:58:49] sfoz: well
[21:59:35] Ansi: u can think of completeness
[21:59:40] Ansi: as for those it should be complete
[21:59:46] Ansi: there simply should be
[21:59:49] Ansi: enough of evidence
[22:00:00] Ansi: to support your conclusions
[22:00:09] Ansi: but the mnemonic here is PROVE
[22:00:15] tud21: true
[22:00:16] Ansi: Presentation
[22:00:19] Ansi: Records
[22:00:23] Ansi: Ownership
[22:00:26] Ansi: Valuation
[22:00:29] temi: hi folks, what tpic
[22:00:30] Ansi: Existence
[22:00:38] Ansi: hi temi, audit evidence
[22:00:46] tud21: i was thinking about existence
[22:00:53] Ansi: now can u say a couple of words about aech of those
[22:01:03] Ansi: {tud21} good
[22:01:04] sfoz: are they not assertions?
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:01:30] Ansi: of course they are
[22:01:40] Ansi: to assert - to confirm
[22:01:49] Ansi: so u need to confirm or prove
[22:01:51] Ansi: those 5 things
[22:02:02] Ansi: and if u prove them u'll get sufficient evidence
[22:02:21] tud21: eg like account balances
[22:02:27] Ansi: okay, you are right ..i should have better mentioned that
[22:02:37] sfoz: presentations in all material respect
[22:02:52] Ansi: {tud21} yeap
[22:03:07] Ansi: {sfoz} yea y ou need to confirm ...what is presented
[22:03:08] sfoz: records relate to the relevant year- cut-off
[22:03:31] sfoz: ok of the financial statement
[22:03:56] Ansi: you are right sfoz
[22:04:01] Ansi: so think of any asset that u own
[22:04:06] Ansi: say u have motor vehicles
[22:04:13] Ansi: u need to prove that ...u own it
[22:04:16] sfoz: non current asset
[22:04:17] Ansi: that's what u disclose
[22:04:21] Ansi: not rent but own
[22:04:22] Ansi: yea any
[22:04:24] sfoz: plant and property
[22:04:31] Ansi: that's first
[22:04:37] Ansi: records
[22:04:39] sfoz: machinery...
[22:04:42] Ansi: what u need to prove here?
[22:04:50] tud21: existence
[22:05:01] selene: ownership
[22:05:11] tud21: valuation
[22:05:14] sfoz: cut-off
[22:05:32] Ansi: {selene} {sfoz} yes
[22:05:45] Ansi: u need to access records and prove that
[22:05:53] Ansi: values shown in FS match those records
[22:06:11] Ansi: u need to prove that they are complete
[22:06:19] Ansi: and that timings match
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:06:20] sfoz: the records follow the accounting policy in application?
[22:06:21] Ansi: that is your cutoff
[22:06:40] Ansi: {sfoz} probably..
[22:06:53] Ansi: now Ownership
[22:07:10] tud21: what about rights and obligation
[22:07:24] selene: thats sort of ownership
[22:07:25] Ansi: {tud21} that's it
[22:07:26] selene: i think
[22:07:28] selene: yeah
[22:07:30] tud21: ok
[22:07:47] Ansi: that's exactly what u prove here
[22:07:53] Ansi: the presence of obligation
[22:07:58] Ansi: as for valuation we mentioned
[22:08:05] Ansi: value shuold be correct
[22:08:10] Ansi: and existence
[22:08:20] Ansi: or in case of transaction - occurance
[22:08:28] tud21: yea
[22:08:37] sfoz: books of account
[22:08:57] sfoz: can confirm existence?
[22:08:59] Ansi: those are records i guess
[22:09:37] selene: thats what we need to prove
[22:09:42] selene: i think
[22:09:44] Ansi: books of account? i am not sure , but i guess they rather prove your records .
[22:09:56] sfoz: ok
[22:10:00] Ansi: alright
[22:10:03] Ansi: returning back
[22:10:08] Ansi: to characteristics of evidence
[22:10:12] Ansi: reliability
[22:10:17] Ansi: what can u say about it
[22:10:22] Ansi: when evidecne is reliable
[22:10:23] sfoz: stock count
[22:10:40] Ansi: what do u mean
[22:10:48] sfoz: well
[22:10:50] tud21: u can rely on the evidence
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:10:51] selene: u can depend on it
[22:10:59] Ansi: {tud21} on which
[22:11:01] Ansi: there are 3 types
[22:11:06] sfoz: it is free from bias
[22:11:09] Ansi: Audior generated
[22:11:11] Ansi: external
[22:11:13] Ansi: and internal
[22:11:18] Ansi: which one is the most not reliable
[22:11:27] sfoz: internal
[22:11:28] selene: independant external
[22:11:34] Ansi: correct sfoz
[22:11:35] Ansi: why
[22:12:03] sfoz: because they produced the evidence
[22:12:04] selene: oops
[22:12:08] selene: not =p
[22:12:10] Ansi: {selene} :)
[22:12:14] tud21: right
[22:12:15] Ansi: {sfoz} they ..who ? :)
[22:12:16] selene: internally generated =p
[22:12:24] selene: the management
[22:12:28] Ansi: i still didn't get the answer ..why it is not reliabile
[22:12:31] Ansi: reliable
[22:12:36] Ansi: {selene} yes..the client
[22:12:49] tud21: because there can be errors?
[22:13:04] Ansi: any better explanation?
[22:13:24] Ansi: it's close tud
[22:13:25] sfoz: it can be influenced
[22:13:35] Ansi: simply because u can't trust it
[22:13:37] Ansi: how can u know
[22:13:41] Ansi: that it match the reliaty
[22:13:47] Ansi: that's simply what client tells u
[22:13:54] Ansi: u need to have proves
[22:14:05] Ansi: if ur client comes and tells u
[22:14:15] Ansi: hey dude, i' e got 10 mln bucks
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:14:20] Ansi: that's just what he says
[22:14:20] Ansi: :D
[22:14:36] Ansi: u've got to take out ur gun and see if he really has those :)
[22:14:50] tud21: ah but u need to confirm for your self
[22:15:08] Ansi: and which one of those 3 is the most reliable?
[22:15:18] tud21: existence?
[22:15:19] selene: the gun might do the trick =p
[22:15:23] selene: like she said
[22:15:33] sfoz: auditor generated
[22:15:33] Ansi: i meant of evidences
[22:15:36] Ansi: yes sfo
[22:15:36] haroonarif: original documents
[22:15:38] Ansi: z
[22:15:45] Ansi: what about external evidence
[22:15:48] Ansi: any examples of those
[22:15:54] sfoz: bank
[22:16:01] tud21: bank
[22:16:04] haroonarif: 3rd party
[22:16:06] sfoz: suppliers demanding payments
[22:16:06] Ansi: {haroonarif} sfoz was correct
[22:16:08] tud21: creditor statement
[22:16:12] Ansi: {haroonarif} {tud21} {tud21} right
[22:16:21] sfoz: government putting pressure
[22:16:23] Ansi: say ..your client shows he has
[22:16:27] Ansi: 5.000 on bank account
[22:16:31] Ansi: so u contact bank
[22:16:33] Ansi: and find out
[22:16:37] Ansi: whehther he has those or not
[22:16:45] tud21: right
[22:16:46] Ansi: and u can guess that it is quite reliable
[22:16:54] Ansi: however
[22:17:08] Ansi: that doesn't mean that auditor should ignore intenal evidence
[22:17:11] Ansi: he looks at it
[22:17:21] Ansi: just relies on external and his own generated one
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:17:29] sfoz: reconciliatons
[22:17:38] Ansi: as example yea
[22:17:51] sfoz: between cash payment and bank statement
[22:17:52] Ansi: 3rrd characteristic
[22:17:56] Ansi: relevance
[22:18:00] Ansi: when evidence is relevant
[22:18:41] tud21: does this have any hing to do with creditbility?
[22:18:49] Ansi: remember F5
[22:18:50] Ansi: :)
[22:19:04] selene: when it is related to the transaction being tested?
[22:19:06] Ansi: it's not exactly credibility tud
[22:19:11] tud21: ok
[22:19:19] sfoz: when it provides audit related...
[22:19:25] Ansi: yes
[22:19:26] Ansi: plus
[22:19:31] Ansi: it's relevant to the subject
[22:19:34] Ansi: say u audit
[22:19:41] Ansi: applse
[22:19:47] Ansi: u will not care about oranges
[22:19:49] Ansi: :)
[22:20:02] Ansi: so to be useful evidence shoul be relevant
[22:20:11] Ansi: to what u actually audit
[22:20:11] tud21: can the auditor use the evidence obtain
[22:20:18] sfoz: ok when it relates to the scope end objectives of the audit
[22:20:26] Ansi: {tud21} of course he can
[22:20:29] Ansi: just for the sake of audit
[22:20:37] Ansi: {sfoz} yes
[22:20:47] Ansi: i liked the way you said it :)
[22:21:12] sfoz: end*
[22:21:15] sfoz: and
[22:21:30] Ansi: and?
[22:21:36] selene: typo
[22:21:44] Ansi: ah
[22:21:54] Ansi: okay
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:22:03] Ansi: let's talk about audit techniques a bit
[22:22:10] Ansi: there is also a mnemonic here
[22:22:11] Ansi: but generally
[22:22:26] Ansi: what are the 5 ways using which auditors obtain evidence
[22:22:48] haroonarif: by enquiry
[22:22:52] Ansi: 1
[22:23:00] haroonarif: observation
[22:23:04] Ansi: 2
[22:23:11] haroonarif: also inspection
[22:23:13] sfoz: reperformance
[22:23:13] Ansi: 3
[22:23:21] haroonarif: 4
[22:23:23] Ansi: {sfoz} recomputation
[22:23:26] sfoz: analytical performance
[22:23:35] Ansi: analytical review
[22:23:39] sfoz: lol
[22:23:41] Ansi: yeap , so we got 5
[22:23:46] Ansi: each of them should be discussed
[22:23:47] selene: aeiou
[22:23:54] Ansi: mnemonic here is AEIOU
[22:24:00] Ansi: but u can use any that u feelokay with
[22:24:12] Ansi: analytical review
[22:24:16] Ansi: what is this one?
[22:24:29] haroonarif: ratios
[22:24:32] haroonarif: trends
[22:24:41] Ansi: exactly
[22:24:52] Ansi: u look at amounts in FS
[22:24:58] Ansi: caluclate ratios and trends
[22:25:06] Ansi: and compares those ratios to
[22:25:09] Ansi: last year's results
[22:25:13] Ansi: or budgets
[22:25:19] Ansi: or to industry standards
[22:25:19] haroonarif: kool
[22:25:29] Ansi: what about next one
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:25:33] Ansi: enquiry
[22:25:44] haroonarif: documentary proof
[22:25:50] haroonarif: talk to management..
[22:26:08] sfoz: and those charged with governance
[22:26:21] Ansi: yea ...inother words it's an external confirmation
[22:26:33] Ansi: oh. .or internal as well
[22:26:35] Ansi: as u say
[22:26:45] Ansi: Inspection
[22:26:49] Ansi: and observation
[22:26:51] Ansi: what's the difference
[22:27:31] haroonarif: observation looks at processes and procedures conducted
[22:27:37] sfoz: observation is more hands off than inspection
[22:27:47] tud21: inspection have to do with existence and observation looking around
[22:27:53] Ansi: there is a very very easy way to distinguish between those
[22:27:55] selene: more like watching whats happening
[22:28:04] Ansi: {selene} what is more like watchin ?
[22:28:12] selene: observation
[22:28:15] Ansi: right
[22:28:16] Ansi: see
[22:28:19] Ansi: the easiest way is
[22:28:31] Ansi: observation is to look at someting that moves
[22:28:33] Ansi: say people
[22:28:35] Ansi: or processs
[22:28:42] Ansi: and inspection at things that don't move
[22:28:44] Ansi: say buildings
[22:28:49] selene: inventory
[22:28:49] tud21: yes or procedures
[22:28:55] Ansi: yea on inventory
[22:28:56] sfoz: yes
[22:29:05] Ansi: well final one
[22:29:09] Ansi: recomputation
[22:29:25] Ansi: well ..it is just as it's called
[22:29:31] Ansi: u simply sit down and recompute
[22:29:36] Ansi: to check whether amounts are correct or not
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:29:42] selene: yeah
[22:29:44] Ansi: alright
[22:29:54] Ansi: we don't have much time so we need to look at questions
[22:29:56] Ansi: first of al
[22:30:04] Ansi: i wanted to say that there are 2 good questions on OT
[22:30:12] Ansi: if u open page with F8 resourches
[22:30:15] Ansi: resources
[22:30:20] Ansi: ans scroll below lectures
[22:30:23] Ansi: u'll find those
[22:30:32] Ansi: there are videos for solution of those questions
[22:30:32] sfoz: what's OT?
[22:30:38] Ansi: Open Tuition :)
[22:30:45] sfoz: lol
[22:30:48] Ansi: :D
[22:30:56] selene: alright
[22:31:10] Ansi: look
[22:31:18] Ansi: see how u can use what we just discussed
[22:31:25] Ansi: did anyone work out the question called Delphic?
[22:31:42] Ansi: no one?
[22:31:44] Ansi: that's good then :D
[22:31:51] Ansi: See
[22:32:13] Ansi: Delphic is a wholesaler of furniture , such as chairs , tables and cupboards
[22:32:35] Ansi: It sells to over 600 customers ranging from large retail chain stores to smaller owner controlled
businesses
[22:32:51] Ansi: The receivables balances therefore range from 125.000 to 5.000
[22:33:17] Ansi: Explain the audit procedures that should be carried out on the receivables balance at Delphic ,
explaining the reason for each procedure
[22:33:40] Ansi: well in other words, how auditor will test those receivables for true and fair view
[22:33:58] Ansi: 10 marks
[22:34:00] Ansi: and thus
[22:34:02] Ansi: 10 tests
[22:34:03] Ansi: :)
[22:34:07] haroonarif: existence ?
[22:34:11] Ansi: yea
[22:34:15] Ansi: what about it
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:34:17] Ansi: how u will tset it
[22:34:17] sfoz: occurrence
[22:34:21] haroonarif: whether the asset actually exists
[22:34:46] Ansi: receivables u mean
[22:34:55] haroonarif: yes non currrent asset
[22:34:58] Ansi: yea
[22:35:00] tud21: check payments and match it with invoive
[22:35:04] Ansi: non current
[22:35:09] Ansi: receivables are non current?
[22:35:14] haroonarif: current
[22:35:17] haroonarif: :)
[22:35:19] Ansi: ok
[22:35:23] haroonarif: lol
[22:35:26] Ansi: well here
[22:35:39] Ansi: they use debtor circulation
[22:35:41] Ansi: as example
[22:35:45] Ansi: does anyone know wht is this?
[22:36:01] tud21: debtors ledger
[22:36:01] Ansi: circularisation
[22:36:03] Ansi: sory :D
[22:36:05] haroonarif: 3rd party confirmation
[22:36:12] haroonarif: like you would do with bank
[22:36:12] tud21: oh ok
[22:36:30] Ansi: can be witht third party
[22:36:38] tud21: u mean like contacting customers to confirm balance?
[22:36:39] Ansi: but what i saw from definition is when they call
[22:36:44] Ansi: to debtors themselves
[22:36:46] Ansi: some of them
[22:36:48] Ansi: yes!
[22:36:49] Ansi: tud
[22:36:58] tud21: oh ok
[22:37:03] Ansi: to check how much their accounts show as being owned
[22:37:16] Ansi: and that is one way of how u can prove existence
[22:37:22] Ansi: which other tests u could do
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:37:28] Ansi: apart from those for existence
[22:37:32] Ansi: for this example
[22:37:47] sfoz: cut-off
[22:37:53] Ansi: what about it and how
[22:38:04] Ansi: u mention cut off about 5 times today
[22:38:06] Ansi: u like this word?
[22:38:11] haroonarif: lol
[22:38:11] sfoz: you will like to know if they relate to that period
[22:38:27] Ansi: what cut off actually means?
[22:38:31] Ansi: yes
[22:38:37] Ansi: are transcations
[22:38:41] Ansi: recorded in correct period
[22:38:58] Ansi: okay
[22:39:01] Ansi: which other tests
[22:39:04] sfoz: that is how it is called in my book
[22:39:07] haroonarif: completeness
[22:39:15] Ansi: how u will test it
[22:39:16] sfoz: if they are recoverable
[22:39:25] Ansi: right sfoz
[22:39:29] Ansi: great one
[22:39:38] haroonarif: make sure everything has been recorded
[22:39:40] Ansi: and that is how u will test presentation
[22:39:58] sfoz: ok
[22:40:10] Ansi: {haroonarif} well u can try to give that as example ..
[22:40:17] Ansi: what else u will test
[22:40:19] tud21: if it is in accordance with applicable law
[22:40:27] Ansi: hm
[22:40:40] Ansi: i didn't even think of such one tud ...looks like yea
[22:40:52] Ansi: u know what surprised me
[22:40:56] Ansi: is that for this question
[22:41:00] Ansi: what lecturer does
[22:41:02] Ansi: is he puts
[22:41:08] Ansi: PROVE and AIEOU
[22:41:16] Ansi: as those 10 things to test
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:41:18] Ansi: :)
[22:41:25] sfoz: use receivable control accounts to check completeness
[22:41:46] sfoz: of records?
[22:41:54] haroonarif: {sfoz} sounds good to me
[22:42:12] Ansi: {sfoz} yes and u will use inspection this way
[22:42:27] sfoz: ok
[22:42:41] Ansi: inspect and reperform the receivables ledger control account reconciliation
[22:42:55] Ansi: not jus for completeness
[22:43:00] sfoz: ok
[22:43:01] Ansi: for accuracy mostly i think
[22:43:10] Ansi: recomputation
[22:43:14] Ansi: u deal with receivables
[22:43:17] Ansi: and sales
[22:43:20] Ansi: so VAT issue
[22:43:32] Ansi: u need to recalculate sales tax
[22:43:48] Ansi: observation
[22:43:57] Ansi: you could attend meeting between client and major custoemr
[22:44:15] Ansi: to check going concern basis and the relationship between them
[22:44:21] Ansi: u can use enquiry
[22:44:33] Ansi: to check if therer are any problem customer
[22:44:38] Ansi: and if yes what is the problem wit them
[22:44:59] Ansi: and
[22:45:03] Ansi: possibly
[22:45:05] Ansi: check that problem
[22:45:11] Ansi: then u will test
[22:45:13] Ansi: ownership
[22:45:15] Ansi: records
[22:45:18] Ansi: and valuation
[22:45:33] Ansi: does anyone know what is receivables aged analysis?
[22:45:43] sfoz: nope
[22:45:52] tud21: ages balances
[22:45:55] sfoz: i don't
[22:45:58] sue888: how long the receivable is pending
[22:46:06] saline: Receiveable age analysis means that how much due balances are still from our customers
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:46:07] sue888: how old is the receivable
[22:46:21] saline: that we are asking from them to pay
[22:46:33] Ansi: {sue888} {saline} yea..
[22:46:47] Ansi: so u use that analysis to check valuation
[22:47:08] Ansi: u check
[22:47:15] Ansi: whther old receivables have been written off
[22:47:26] Ansi: okay
[22:47:31] Ansi: let's search for any other question
[22:47:56] sfoz: ok
[22:49:28] sfoz: aeiou, not sure i know it all pls help
[22:49:40] Ansi: what do u mean/
[22:49:42] sfoz: inquiry, observation
[22:49:56] Ansi: ?
[22:50:00] sfoz: a stands for?
[22:50:05] Ansi: Analytical procedures
[22:50:09] Ansi: Enquiry
[22:50:12] Ansi: inspection
[22:50:15] Ansi: Observation
[22:50:18] Ansi: compUtation
[22:50:36] sfoz: authanks comes and goes
[22:50:55] sue888: what?
[22:51:12] tud21: {sue888} she didn't remember it
[22:51:30] sue888: have to remember the key words
[22:51:43] sue888: find ways to...
[22:51:55] sfoz: i must
[22:52:02] sue888: yes
[22:52:08] sue888: think so
[22:52:10] sue888: :)
[22:52:38] Ansi: just checked past papers
[22:52:46] Ansi: questions are either simple theory
[22:52:53] Ansi: or part of very huuuuge ones :)
[22:53:25] Ansi: well
[22:53:32] Ansi: tell me those then
[22:53:41] tud21: these question will make u burst ur brain open lol
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:53:51] Ansi: List two reasons why audit evidence is likely to be presuasive
[22:53:55] Ansi: rather then conclusive
[22:53:56] Ansi: :P
[22:54:35] sfoz: because it is meant to provide assurance
[22:54:40] tud21: it is persuasive?
[22:54:51] sue888: opinion is subjective
[22:54:55] saline: because the evidence is based on judgements like the valuation documents by actuary
[22:54:58] sfoz: it is not an end in itself
[22:55:05] sue888: so no conclusive
[22:55:31] Ansi: of course , you are all correct
[22:55:40] Ansi: but can u give
[22:55:43] Ansi: more ....daily proofs
[22:55:47] Ansi: from reality
[22:55:54] Ansi: not jsut those general words
[22:56:04] tud21: ok
[22:56:54] saline: for collecting evidence of due recievables list of detors is required and there are 100s of recievalbles
so its not necesaarily possible to contact these 100s of reciavleb and have the confirmation letter as an evidence from
them replied
[22:57:15] tud21: people can make mistakes
[22:57:43] Ansi: {tud21} yea
[22:57:46] sfoz: it is selective, it is sampled
[22:57:47] sue888: they can't do test on all the evidence
[22:57:56] Ansi: {saline} of course
[22:58:03] Ansi: u do tests
[22:58:08] Ansi: and u can't check evreything
[22:58:18] Ansi: plus
[22:58:25] Ansi: documents can be easily forged
[22:58:29] tud21: yes
[22:58:43] tud21: and ppl don't always speak truth
[22:58:51] sue888: lol
[22:58:54] tud21: lol
[22:58:54] Ansi: :))
[22:58:55] sfoz: lol
[22:58:56] sue888: really?
[22:59:14] Ansi: really :)
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[22:59:20] Ansi: another question
[22:59:22] Ansi: say
[22:59:30] Ansi: u want
[22:59:35] tud21: u can't trust every thing mgtent say u know
[22:59:43] Ansi: to test that plant and equipment recored in teh FS of the client does actually exist
[22:59:46] sue888: for sure
[22:59:53] Ansi: which audit prodecure
[22:59:56] Ansi: u will go for
[22:59:58] Ansi: :)
[23:00:00] selene: existence
[23:00:02] Ansi: procedure
[23:00:18] Ansi: existence is accertion
[23:00:19] sue888: find the deed of the plant
[23:00:21] selene: inspection
[23:00:26] saline: by physically inspecting the asset
[23:00:27] sfoz: inspection
[23:00:30] saline: yes
[23:00:32] tud21: yes
[23:00:35] sue888: envoice of the equimpment
[23:00:41] sue888: go there have a look
[23:00:43] Ansi: {sfoz} {saline} right
[23:00:46] Ansi: {sue888} yes
[23:00:49] Ansi: inspection
[23:00:53] Ansi: simple physical inspection
[23:01:07] Ansi: the best way to get evidence of non currect assets
[23:01:10] Ansi: second one
[23:01:23] Ansi: say u want to confirm accuracy of the figures for the director's bonuses
[23:01:47] Ansi: which proecure
[23:01:49] Ansi: procedure
[23:01:50] sfoz: recomputation
[23:01:56] Ansi: yeap
[23:02:04] Ansi: you are so well prepared for today sfoz :)
[23:02:14] tud21: ahan
[23:02:16] sfoz: thanks
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[23:02:17] tud21: lol
[23:02:25] sfoz: i pray it lasts
[23:02:31] Ansi: so here to simple recompute those figures
[23:02:34] saline: AEIOU are used for audit procedures ?
[23:02:42] Ansi: which are initially computed by client
[23:02:45] Ansi: yes
[23:02:50] sue888: yes
[23:02:53] Ansi: and third
[23:03:12] Ansi: if u want to undersatnd the nature of an unusual payment recorded in the cash book
[23:03:18] Ansi: which one
[23:03:37] tud21: enquiry
[23:03:42] Ansi: wow :)
[23:03:45] Ansi: u got it
[23:03:46] Ansi: :)
[23:03:53] tud21: thnks
[23:03:54] Ansi: and how u will perform it?
[23:03:54] sue888: well done
[23:04:13] kurthamil: bank recon??
[23:04:24] tud21: confirm with bank statement
[23:04:27] Ansi: is that enquiry?
[23:04:33] Ansi: it's something more complicatd :))
[23:04:33] sue888: get confirm from the third party
[23:04:41] tud21: speak with mght
[23:04:42] sue888: contract
[23:04:42] sfoz: understand the treatment of that particular transaction
[23:04:48] Ansi: yes u simply enquire about it
[23:04:50] Ansi: go and ask
[23:04:59] Ansi: and not even teh bank
[23:05:03] Ansi: u ask managemen
[23:05:04] saline: k
[23:05:09] Ansi: it's a cash book
[23:05:14] tud21: right
[23:05:16] Ansi: :)
[23:05:25] Ansi: okay guys, i guess it's enough for now :)
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[23:05:30] sue888: great
[23:05:31] Ansi: next time we'll moveo n with evidence
[23:05:33] sue888: :)
[23:05:39] Ansi: audit of specific items,
[23:05:41] Ansi: and mostly
[23:05:43] Ansi: sampling
[23:05:47] sfoz: :)
[23:05:56] Ansi: computer assisted audit
[23:06:02] Ansi: and two other cahpters
[23:06:06] Ansi: one called
[23:06:11] Ansi: work of others :D
[23:06:17] Ansi: i wonder what it means
[23:06:20] Ansi: and next one NFP
[23:06:24] Ansi: just in brief
[23:06:28] Ansi: and for now ..enough
[23:06:29] Ansi: :)
[23:06:30] sue888: copy the internal auditor's work
[23:06:38] Ansi: go to bed or disco or whatever u plan
[23:06:38] sue888: if u think you trust them
[23:06:53] sfoz: and expert work
[23:06:54] Ansi: thank you for your presence and active participation
[23:06:58] saline: selene
[23:06:58] Ansi: :)
[23:07:00] sfoz: thank you
[23:07:05] saline: status is superb :)
[23:07:07] Ansi: next time ..thursday 6:30 pm
[23:07:11] saline: ANSI thanks:)
[23:07:13] sue888: k
[23:07:15] sue888: thanks
[23:07:20] sfoz: k
[23:07:20] sue888: see u all
[23:07:25] selene: =p
[23:07:27] sfoz: see u
[23:07:27] Ansi: {sue888} welcome
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F8 (Int) – Session 10
15/09/2011 – F8 chat room
[23:07:31] Ansi: see u all :)
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