Performance Support 9- Test of Details Example

Cash substantive testing

The Audit Experience AS/2

AUDIT DOCUMENTATION FOR TESTS OF DETAILS

Preparer PT [3/14/2013]
Reviewer [JO 3/14/2013]

Audit Purpose: The purpose of this working paper is to test the subtractive reconciling items per the Community Bank reconciliation located at wp 5120(M) to address
the risk of material misstatement identified below:
Cash risk Cash 001-There is a risk that the bank account as per the general ledger may be misstated due to incorrect reconciling items.
Audit Procedures: The following procedure has been performed in this working paper to address the risk documented above:

WP 5100

It is clear what audit procedures are

being performed by referring to the audit
procedures in the Model Audit program;
are the audit procedures clearly
documented and have the results of the
procedures been included?

Have the working

papers been signed
off?

In accordance with substantive procedure Cash-SP-001 related to cash risk Cash-001 in working paper 5130 Cash MAP:
- For all bank reconciliations, select a sample of reconciling items using audit sampling.
- Perform tests of details on the selection of reconciling items and determine if they are appropriate.
Was the source of the population
documented? Depending on the selection
method and objective of the test were
items greater than performance materiality
separately selected?

Results: Based on testing performed, subtractive items appear properly included as reconciling items in the bank rec. as of Dec. 31 2012

Sample size:
$
2,689,000 {a}
1,308,668 {e} A
1,380,332 Rx

Population
Total Items > Performance Materiality
Remaining Population
Performance Materiality
Risk
Controls

642,000 {b}
Not Significant {b}
Not Relying
{b}

Population Size Multiple of Performance Materiality

Sample Size
Items greater than Performance Materiality
Total Sample Size

Was the sampling method and

where the selections were
obtained from clearly
documented?

2.15 {b}
5 {c}
2
7 Rx

Was the sample

size calculated
properly?

Testing:
#

Is there documentation or
a reference where
performance materiality,
classification of risk, and
control reliance were
obtained from and how
the sample size is
calculated?

Check #

Items > Performance Materiality

1
81227
2
81229
Remaining Selections
3
81223
4
81219
5
81221
6
81223
7
81230

Amount
$

Date per
Bank

665,382 5-Jan-13
643,286 8-Jan-13
1,308,668 A
8,639
58,765
20,901
44,609
18,732

9-Jan-13
17-Jan-13
4-Jan-13
8-Jan-13
15-Jan-13

Date per
Check

Correctly Included / excluded in

OS Checks

31-Dec-12
3-Jan-13

Yes
Yes

{d}
{d}

5-Jan-13
13-Jan-13
30-Dec-12
29-Dec-12
5-Jan-13

Yes
Yes
Yes
Yes
Yes

{d}
{d}
{d}
{d}
{d}

T/m

Have the audit procedures

performed been
documented for each
selection?

Was the appropriate

audit evidence
reviewed for each
selection, properly
documented, and
concluded upon?

Rx = Mathematical calculation verified.

Note that this performance support does not replace the AAM. It should be read in conjunction with the applicable AAM topics, as the manual states
the requirements of our audit approach and provides further guidance.

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Where there is a
calculation, has
documentation been
provided to show that it
calculates accurately?

Have all the

tickmarks
been properly
attached?

Performance Support 9- Test of Details Example: Tickmarks Tab

The Audit Experience AS/2

Tickmarks
{a}

The population was obtained from Jan 1 - Jan 31, 2013 Community Bank
bank statement. Represents total amount of debits during the period per the
bank statement.

{b}

DTTL obtained performance materiality from the planning working paper

1710.
The population being tested is 2.15 x's Performance Materiality. This testing
is addressing a risk (not significant and not relying on controls). Based on
professional judgment and per the Audit Sampling Size Table in the Audit
Approach Manual (Figure 5410.1), we have determined the sample size to be
5. We have understood the multiples of performance materiality referred to in
the Audit Sampling Size Table to be up to and including the specific multiple.
Therefore the sample size of 5 appears reasonable.

{c}

DTTL made a nonstatistical representative sample. Selections were made

from the January 2013 bank statement.

{d}

Agreed amount, date, and payee to copy of cancelled check (check honored
by the bank and stamped as having been processed to ensure it cannot be
presented again), noting propriety of date (i.e. prior/subsequent to year-end).
Noted proper inclusion/exclusion of item within detail of subtractive
reconciling items as of 31-Dec-2012.

{e}

This amount represents the total of all the items greater than performance
materiality in the population (Note: Based on our understanding of the
transactions flowing through the bank account that we obtained as part of our
risk assessment procedures, we determined that payments over the amount
of performance materiality are to be selected during the testing of the
reconciling items on the bank reconciliation). These have been selected for
testing based on the risk identified and were removed from the original
population in order to determine how many more selections must be made
for this representative sample.

{f}

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Have all the

tickmarks
been properly
attached?

There are no other

tickmarks that contain text
that have not been
attached (i.e., unattached
tickmarks)