Summarized Procedures

of Audit Tests for

Financial Statements

Student: Anmol Walia

Mentor: Mr. Dennis Gardner, CPA
Wrinkle, Gardner & Company, P.C.
Independent Study Mentorship - Fall 2017
Mrs.Click
Introduction
As a disclaimer some of the information in this
presentation is from outside sources
You can visit anmolwaliaism.weebly.com for
any additional information or just as a preview
of my time shadowing under this topic
Throughout the presentation I will incorporate
various found artifacts from the office
DENNIS C. GARDNER, CPA

Wrinkle, Gardner & Company, P.C.

3231 West Parkwood FM528
Friendswood, TX 77546

Mr.Gardner is a Certified Public

Accountant with a BS in accounting from
the University of Houston - Clear Lake
He heads the consolidation services,
accounting, attestation and auditing
practices at the firm

To my left is mentor, Mr.Dennis Gardner, and

standing on my right is manager of audit at
the firm, Mr.Joey Bradshaw.
ISM

Independent Study Mentorship (ISM) is an advanced academic course

designed for students seeking professional experience in an environment
of a chosen career, the program requires students to

Complete an in-depth study in a topic of interest

Document 3 mentorship hours per week along with maintaining a
Journal Entry
Complete an ISM Professional Portfolio
Develop a Final Product and Presentation to a panel of graders

Home - Clear Creek. Home - Clear Creek, www.ccisd.net/.

Project Topic
Summarized Procedures of Audit Tests for Financial
Statements

My topic of interest explores the review that comes with financial

statements with specific concern on the difference between balance
sheet and statement of operation analyzation.

I chose my topic for its accessibility and understanding benefits

Wrinkle, Gardner & Co.s first of few public

clients
The basics of comprehending tests will assist
me to make judgements for myself
 Research

For my three key points (Audit Test, Balance Sheet, and Income Statement)
I based my research on the following... QuickBooks Accounting: Invoicing &
Expenses - Android Apps on Google
Play. Google, Google,
play.google.com/store/apps/details?id=c

-The difference between the two types of statements (balance sheet and om.intuit.quickbooks.

statement of operations), along with when and how to apply them

-Programs used to bookkeep and build the two financial statements (ex.
QuickBooks, Excel, Caseware, etc.)

-Meaning of public vs private clients and importance, the client I will

generally be working with will be public and referred to as ABC and ABC
Pipeline

-What conclusions to come to when summarizing financial statements

based off financial trends
 Broad Detail of Audit Testing
What exactly is an Audit Test?
Noticing misstatements
The auditor must obtain sufficient appropriate audit evidence by performing audit
ent procedures to afford a reasonable basis for an opinion regarding the financial
t h e cli ts in
on n
e p ends d j u stme n the statements under audit, (AICPA, 1781)
d a o
eally have uch
Tests of Control are followed up by typical Audit Procedures in
It r ly well not so m r
al s, ne
typic ory area Mr.Gard determining the specific risks
nt -
inve y side.
i l i t
liab

Purpose of audit tests, why companies need them yearly

ABC for example will use the following information to

understand trends and so will shareholders

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 Description of Financial Statements

Balance Sheet

Snapshot analogy when looking at

balance, a certain date within the year
Assets = Liabilities + Stockholders equity
Assets and liabilities portion of the sheet are organized by time,
for assets: the sooner the client can make an asset liquid
(cash), the higher up it is on the sheet
for liabilities: the sooner something is owed the higher up
it is on the sheet
Balance sheets in particular serve two primary purposes
(O'Rourke),
Telling a client whether or not theyre in debt
Determining the worth of assets Financial Statements 101: How to Read and Use Your Balance
Sheet.Http://Www.apapracticecentral.org,
www.apapracticecentral.org/business/finances/balance-sheet.aspx
Balance Sheet Components

Assets

Cash, Accounts Receivable (given but not received), Inventory (Raw Materials,
Work in Progress, FInished Product), Property, Prepaids (Money due to you as a
company), Investments, Related Parties (ABC & ABC Pipeline)

Liabilities

Accounts Payable, Sales Taxes Payable, Short-term Debt, Total Current Liabilities,
Long-term Debt, and Total Liabilities

Equity

Paid-in Capital, Retained Earnings, Net Earnings, Total Owners Equity, Total
Liabilities and Equity

**Insignificant if under Materiality**

Description of Financial Statements

Statement of Operations

Range of dates, activities within a

time frame for example General
Electric
Allow an understanding of business
revenue and expenses
Revenue > expenses the
business is labeled
profitable
Expenses > the revenue the
business is labeled a loss
A companys bottom line- final line Advameg.com. CLOUD PEAK ENERGY INC. Pixma,
www.getfilings.com/sec-filings/100520/CLOUD-PEAK-ENERGY-INC_8

of statement, it includes the net -K/a10-10501_1ex99d1.htm.

profit of the company typically over

a year (O'Rourke)
Income Statements are organized by the
following (O'Rourke):
Revenue- top line, money coming in
Direct Costs- cost of goods sold
Gross Margin- gross profit
Operating Expenses- all expenses for upkeep of business
Operating Income- earnings before interest, taxes, depreciation, and amortization (EBITDA)
Interest- payments made on loans
Depreciation and Amortization- assets associated expenses
Taxes- expected tax amount to pay
Net Profit- prime line, usually determines business value at-a-glance
Product
For my presentation I plan on displaying a blown up poster of a balance
sheet and statement of operations with labels and titles pointing out
individual portions of the example.
 Conclusion
Now that I have completed a sound understanding of the
paperwork that goes into typical audit clients, I hope to
conclude my mentorship experience for the semester
around two main topics,

Seasonal responsibilities; as the year comes to a close, I

would like to understand the duties that come with the
preparation of and the tax season itself
Networking methods; how to obtain new clients and
maintain current ones
to
ing
a y s go nna
o
e alw ys g
o p l e ar e alwa lot of
k pe eyr res a d in
t I thin ants, th The y , an
B u u n t c e e n t l
acco advi curr ardner
need n us for ut there
o o Mr.G
rely tunities future.
or le
opp
r es eeab
o
the f Constine, Josh. The Conclusion. TechCrunch, TechCrunch, 14 Aug. 2016,
techcrunch.com/2016/08/14/compost/.
Finally,

I would like to show great thanks to Wrinkle, Gardner & Co. for all the generosity
and comfortability theyve provided in this learning process, and specifically to
Mr.Joey Bradshaw, Mrs.Morgan Nathan, and Mr.Joel McCray for the individual
support they have given, and a most sincere thank you to Mr.Dennis Gardner for
being my mentor and guiding me in understanding a whole new world of
financial dynamics I one day hope to be a part of.

Thank You evaluators for allowing me to share what Ive learned with you today.

Thanks Mom! I most definitely would not be here without you!

And Thank You Mrs.Click for the helping me experience a profession of my

interest outside of a classroom setting.

Thank You Banner. Best Business Template, www.soccerbbc.com/15965/thank-you-banner.html.

 Works Cited/References
Advameg.com. CLOUD PEAK ENERGY INC. Pixma,

www.getfilings.com/sec-filings/100520/CLOUD-PEAK-ENERGY-INC_8-K/a10-10501_1ex99d1.htm.

Constine, Josh. The Conclusion. TechCrunch, TechCrunch, 14 Aug. 2016, techcrunch.com/2016/08/14/compost/.

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www.tenable.com/lp/campaigns/security-metrics/index.html.\

Financial Statements 101: How to Read and Use Your Balance Sheet.Http://Www.apapracticecentral.org,

www.apapracticecentral.org/business/finances/balance-sheet.aspx.

Home - Clear Creek. Home - Clear Creek, www.ccisd.net/.

O'Rourke, Angelique. What Is a Balance Sheet? Bplans, Palo Alto Software, 12 May 2017, articles.bplans.com/balance-sheet/.

O'Rourke, Angelique. What Is an Income Statement? Bplans, Palo Alto Software, 12 May 2017,

articles.bplans.com/income-statement-2/.

Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained. Accounting Unit 318, 18

Nov. 2013, pp. 17811799. AICPA,

Works Cited/ References
QuickBooks Accounting: Invoicing & Expenses - Android Apps on Google Play. Google, Google,

play.google.com/store/apps/details?id=com.intuit.quickbooks.

Thank You Banner. Best Business Template, www.soccerbbc.com/15965/thank-you-banner.html.

Wrinkle Gardner & Company Is an Accounting Firm You Can Trust With Over 25 Years of Experience. Friendswood, TX

Accounting Firm | Graphic Intro Page | Wrinkle Gardner & Company, wrinklegardner.com/.