Page 14 - eBook Audit Of Financial Statement Components

Key Control Audit Procedures Audit Assertions
Features

4. Invoicing - Ascertain invoicing system Completeness
- Ensure invoices are referenced to orders Measurement
and delivery notes
Valuation
- Check pricing and ensure terms of sales
are in accordance with the company’s
policies
- Ascertain reasons for cancellation of sales
invoices

- Check calculation
5. Credit - Ensure proper authorization for issue of Existence
Notes credit notes
Occurrence
- Verify reasons for issuance

- Vouch to supporting documents for return
of goods, discount given, adjustment in
pricing etc

The nature, 6. Credit - Ascertain system of credit control in force Existence
Control
timing or - Ascertain company’s approved credit Occurrence
limits and periods
extent of the - Check subsequent payments from
customers
substantive - Review credit control report

procedures is 7. Posting to - Check posting to inventories, debtors’ and Measurement
ledger general ledger accounts
Completeness
based on the - Check reconciliation of debtors’ subsidiary
and control account
results from

the test of

controls and 1.2.2 SUBSTANTIVE PROCEDURES FOR REVENUE

the level of
The audit program for substantive procedures is prepared based
detection risk.
on a preliminary assessment of control risks. The nature, timing

or extent of the procedures is based on the results from the test

of controls and the level of detection risk. However, the auditor
may use professional judgement to determine how detailed

substantive procedures are and normally, the auditor performs

more than the minimum level of testing.

7