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1. Are we doing Transactions or Year End?

2. If Transactions, are we Testing Controls or doing Substantive?
3. If testing Controls:
Find the Controls:
Test them using Inspect, Reperform, Enquire, Observe
4. If Transactions Substantive:
1. Start with the Flow of Documents
What do we have and how do they flow together?
2. Decide on Direction of Test
3. Inspect, Reperform, Enquire, Observe
Again?
Yes, now substantively.
So take the flow and Inspect the Docs
And Reperform that:
They agree to each other
Calculations etc.
4. Reperfrom that entered in the accounting records?
Allocation etc.
5. Anything on Reversals/Adjustments
6. Do your Common Student Omissions (CSOs) See below
5. If year end Substantive
1. Start with the Ss in the CSOs
2. Assertions
Existence
Rights Obligations
Valuation
Split it into
Book Value
Year end Value
Impairment
Completeness
3. Use your basic procedures:
Confirm
Inspect
Reperform
Enquire
(Observe Not really substantive)
(Analyticals Usually a Backup)



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4. Think of it as a check list like this:
Confirm Inspect Reperform Enquire
Existence

In your minds eye, tick off the boxes
in this table so that you have at least one source of evidence
for each assertion
Rights
Valuation BV
YE
Impairment
Completeness
Presentation

5. Complete the CSOs
The Common Student Omissions:
Schedule - Did you obtain a schedule of the item in question?
Sample - Did you indicate that you would be checking a sample above? Probably a
sample biased toward high Rand value items.
System - You should probably have mentioned a review of your previous tests of
control to ascertain whether the system is reliable.
Accounting - Did you gather evidence concerning all important accounting issues?
Refer to the number of references above.
Analytical Reviews - Detailed analytical reviews may form a significant part of
your solution.
Adjusting entries Did you check any adjusting entries and flag audit differences?
Allowances - Did you do audit work on all provisions/allowances?
Expert Did you use an Expert where necessary Did you describe what the expert
is going to do? Did you deals with the basics per ISA 620?
Arithmetical Accuracy - Check all calculations etc.
Taxation - Without overemphasising taxation, did you audit the tax consequences
related to the item under audit? Refer to the number of references above.
Cut Off - Did you check year end cut off? Note the detail in the tutorial examples.
Representations - Typically 1 Mark.
Agree to general Ledger: Did you check control account reconciliations? Did you
check that your audited balance agrees to the general ledger, trial balance, lead
schedules and financial statements?
Did you check any Present Value Computations and the related discount rate?
MNEMONIC SSS AAAA EAT CRAP