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AN INTRODUCTION
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Table of Contents:
AN INTRODUCTION
AUDITORS’ REPORT
Advantages and Disadvantages of Auditing
OBJECTIVE AND GENERAL PRINCIPLES GOVERNING AN AUDIT OF FINANCIAL STATEMENTS
What is Reasonable Assurance
LEGAL CONSIDERATION REGARDING AUDITING
Appointment, Duties, Rights and Liabilities of Auditor
LIABILITIES OF AN AUDITOR
BOOKS OF ACCOUNT & FINANCIAL STATEMENTS
Contents of Balance Sheet
ENTITY AND ITS ENVIRONMENT AND ASSESSING THE RISKS OF MATERIAL MISSTATEMENT
Business Operations
Risk Assessment Procedures & Sources of Information
Measurement and Review of the Entity’s Financial Performance
Definition & Components of Internal Control
Auditing ASSIGNMENT
Benefits of Internal Control to the entity
Flow Charts and Internal Control Questionnaires
Construction of an ICQ
Audit evidence through Audit Procedures
SUBSTANTIVE PROCEDURES
Concept of Audit Evidence
SUFFICIENT APPROPRIATE AUDIT EVIDENCE AND TESTING THE SALES SYSTEM
Control Procedures over Sales and Debtors
Control Procedures over Purchases and Payables
TESTING THE PURCHASES SYSTEM
TESTING THE PAYROLL SYSTEM
TESTING THE CASH SYSTEM
Controls over Banking of Receipts
Control Procedures over Inventory
TESTING THE NON-CURRENT ASSETS
VERIFICATION APPROACH OF AUDIT
VERIFICATION OF ASSETS
LETTER OF REPRESENTATION VERIFICATION OF LIABILITIES
VERIFICATION OF EQUITY
VERIFICATION OF BANK BALANCES
VERIFICATION OF STOCK-IN-TRADE AND STORE & SPARES
AUDIT SAMPLING
STATISTICAL SAMPLING
CONSIDERING THE WORK OF INTERNAL AUDITING
AUDIT PLANNING
PLANNING AN AUDIT OF FINANCIAL STATEMENTS
Audits of Small Entities
AUDITOR’S REPORT ON A COMPLETE SET OF GENERAL PURPOSE FINANCIALSTATEMENTS
MODIFIED AUDITOR’S REPORT