Audit Procedures

Audit debt: Assertions, Risks, and Procedures

Auditing Debt Debt is simply liabilities, the amount the company owes to someone. Auditing of debt requires an understanding of complex debt instruments, classification of debt as per covenants, and characteristics of debt. In the financial statements, the debit balance at the reporting date is reporting the balance sheet under current or non-current liabilities depending …

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Audit Procedure for Provision: Procedures, Risks, and More

What is an audit procedure? Audit procedures also referred to as audit programs involve the procedures, methods, and strategies that auditors implement in order to achieve audit confirmation. It assists them to deduce if the audit objective was fulfilled according to the given data.  Auditing is carried out in three steps: Step 1 – Recognize the statement claim being …

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Substantive Audit Procedures: Definition, Types, and Examples

Introduction: Auditing is considered a very integral function of the business because it validates the extent to which operations and financial standing within the company have been taken care of. In this regard, it is increasingly important to recognize the fact that the process itself is supposed to be designed and executed in the manner …

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Auditing Related Party Transactions: Risks, Assertions, And Procedures

Introduction Related Parties Transactions are transactions that take place within an organization that takes place with other organizations that are directly, or indirectly related to the organization in question. As a matter of fact, related party transactions might include transactions between a parent entity and its subsidiaries, subsidiaries of a common parent, an entity, and …

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Audit Procedures for Goodwill (The Main Procedures You Should Know)

What is goodwill? Goodwill is normally considered intangible non-current assets in the consolidated statement of financial position when a company purchases another company where the fair value of net assets of the company being purchased is less than purchase consideration. The difference is considered as goodwill. For example, ABC Co purchased 100% of DEF Co …

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Audit Procedure for Advertising Expenses: (Risks and Assertions Include)

Overview: Advertising expense is one of the operating expenses that joint with other expenses to operate the business. To perform effective and sufficient testing on this expense, the auditor has to focus on both controlled testing and control validation. Firstly, the auditor has to perform understanding and study on overall picture of advertising expense before …

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Audit Procedure for Borrowings: Risks, Controls, Assertions, and Procedures

Overview: To perform effective and sufficient testing on borrowings is not only focus on control testing but also focus on control validation by selecting some supporting document for vouching. The auditor could use different methods and amounts of sample to be vouched based on the risk assessment result. There is a good start for understanding …

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Audit Procedures for Cost of Goods Sold: Risks, Assertion, and Procedure

The cost of goods sold testing is conducted at the same time as inventory testing is carried out for purposes of the balance sheet. The cost of goods components can broadly be categorized into two major components. Firstly, the auditor is supposed to determine the overall amount of inventory sold. If the auditor has been …

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