Audit test by mdfauzimail

Audit test by mdfauzimail https://padlet.com/mdfauzimail/vncycucwjn7e Made with ..... en-us 2017-03-07 00:08:47 UTC 2023-03-15 16:41:49 UTC hello@padlet.com https://padlet-assets.s3.amazonaws.com/icons/Lovecoffee.png Walk through test https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158206755 NAZIFA BT ZAMIR (01DAT15F2081)
NURUL AIN BT AINURIZAM (01DAT15F2043)

MEANING : The act of tracing a transaction through organizational records and procedures to learn how a process works.
PROCEDURE :
1) The auditor watches how you or your staff operate when writing down a transaction in your accounts
2) Whenever someone documents what's happening , auditors reviews the documents.
3) If your company has controls to reduce errors and fraud, the auditor may test the control to see if they work.
4) Watching employees processing a transaction provides better .evidence,going over the paper work and confirming its accuracy is better still.
5) The ultimate test is when the auditor repeats the control method by itself.
EXAMPLE : Auditor will select sales transactions for accounting system walkthrough from credit approval process and then follow the credit approval process from starting point of the sales through granting the credit]]> 2017-03-07 00:22:17 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158206755 Vouching https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158206829 Nur Fatin Syahirah bt Muhammad Fadzil (01DAT15F2048)
Nur Fardahana bt Anuar (01DAT15F2032)

* examination of documents that support a recorded transaction or amount
* refers to first selecting an item from accounting journals or ledgers and then examining the source documents
* the directions of testing must be from the recorded item to the supporting documents
* provides evidence that items included in the accounting records occurred
* test existence or occurrences-ensure that transaction are reliable and valid
* the important part are the date of transaction occurs within accounting period, proper authorization of relevant person
* substantive procedure
EXAMPLE OF VOUCHING

A manufacturing company submit its financial statements and book of accounts to a leading auditing firm for vouching. The auditor which undertakes the project seeks to verify that the company's transaction are valid, business-related and properly authorized.

In company's cash book, the auditor identifies entries of cash sales, receipts from creditors, interest income, dividend income, mortgage payments, fixed asset sales and accounts receivable. By using this technique, the auditor reviews all the entries and seeks for the relevant documentary evidence that supports and verifies each transaction.
The auditor finds documentation of receipts, capital expenses, and other that pertain to the recorded transaction in the book of accounts. With the proof of being vouched, the auditor ensures that the claims provided in the book of account are justified, and the company does not engage in any type of fraud.
If the auditor didn't vouch, he might have incurred control risk by neglecting some important information and failing to display appropriate due diligence in reviewing the company's book. Often, auditor are guilty of fraud by presenting a company's financial technique, the auditing process is accurate and transparent.

]]> 2017-03-07 00:23:08 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158206829 VERIFICATION https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158206955 Natasha Sahiera binti Ghazali ( 01DAT15F2075)
Nurul Elyani binti Adzemi ( 01DAT15F2053)

MEANING - ' Proving the truth ' or 'confirmation'. Verification is and auditing process in which auditor satisfied himself with the actual existence of asset and liabilities appearing in the statement of financial position.

-Involves carrying out test including reviewing inspecting and checking .
- For instance, the auditor need to review all the financial statement.
- Substantive audit procedure that deals with examination with balance sheet items.
- Whether all assets and liabilities are properly state in the balance sheet.
- Also applies to profit and loss items to check the account balances and their existence,
- The verification process confirm the ownership, existence, valuation, presentation of asset and liabilities in the balance sheet,
- Physical verification involves inspecting the actual asset of the company to ensure that they are same with written records.
- Usually deals with the final balance in the final account.
- Sample based verification: A sample of staff an impact case study submit by each HEI will be audited.
- Data Comparison: The REF submission system will ensure the internal valid of submission and will valid date the institution environment data. After the submission have been made we will check for consistency across institution submission and make comparison with other relevant sources of data to identify potential data that may result in target verification queries.
-Type of product and scale business verification may include:
*internal audit.
*external audit on supplier.
*evaluating customer feedback analysis including complaints.
*undertaking raw material or end product testing.
*analysis and confirmation that the controls, monitoring and corrective actions are being properly applied.

]]> 2017-03-07 00:24:34 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158206955 TEST OF CONTROL/COMPLIANCE TEST https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207076 BEH JUN KIT 01DAT15F2029
KISHAN 01DAT15F2067

●Purpose: Procedures to test effectiveness of controls in
support of reduced assessed control risk.
●Assessing control risk: Consider the design and
operation of controls to evaluate whether they will
likely to be effective in meeting transaction-related audit objectives (worth relying upon).
●If the auditor is not satisfied with the test of control, substantive test (comprehensive) will be carried out.

Assessing control risk:
●Auditor needs to obtain understanding of internal control: design and operation.
●Preliminary assessment of control risk made:
✔Whether the entity is auditable (integrity of management and
adequacy of accounting records).
✔For each transaction-related audit objective for each major types
of transaction in each transaction cycle. Example: In the sales and
collection cycle, the types of transactions usually involve sales, sales returns and allowances, cash receipts, and the provision for and write-off of uncollectible accounts.]]> 2017-03-07 00:25:49 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207076 Test of control https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207360 Voshalini d/o Ravichandran
(01DAT15F2040)
Viknes s/o Marimuthu
(01DAT15F2071)
What is audit test:
-The audit test will be carried out by the auditors to develop the overall audit plan to perform the audit effectiveness.
-This decision also includes the decision about the types of audit tests to be performed in audit.
*Below is one of the type of audit test which is the :TEST OF CONTROL
Meaning of test of control:
*A test of controls is an audit procedure to test the effectiveness of a control used by a client entity to prevent or detect material misstatements. Depending on the results of this test, auditors may choose to rely upon a client's system of controls as part of their auditing activities.
*The test reveals that controls are weak, the auditors will enhance their use of substantive testing, which usually increases the cost of an audit. The following are general classifications of tests of controls:
-Reperformance. Auditors may initiate a new transaction, to see which controls are used by the client and the effectiveness of those controls.
-Observation. Auditors may observe a business process in action, and in particular the control elements of the process.
-Inspection. Auditors may examine business documents for approval signatures, stamps, or review check marks, which indicate that controls have been performed.
Further information about test of control:
-If the inspection approach is used, a test of controls is typically conducted for a sample of documents related to transactions that occurred throughout the year. Doing so provides evidence that the system of controls has operated in a reliable manner throughout the reporting period.
-If the auditors encounter an error in a test of controls, they will expand the sample size and conduct further testing. If additional errors are found, they will consider whether there is a systematic controls problem that renders the controls ineffective, or if the errors appear to be isolated instances that do not reflect upon the overall effectiveness of the control in question.
-Moreover, it consists of test designs in purpose to achieve confidence level appropriately on effectiveness or internal control as auditor relies
on it.
-It also consists of procedures directed towards testing the operating effectiveness of controls.
Example of test of control:
1.The auditors will examine the invoices to verify the documents that received and proof of delivery attached.
2.The auditors also assume the client's internal control required the verification by an independent clerk on all unit selling prices of sales before the sales invoices are mailed to customers.
3.Therefore the possible test for the effectiveness
of this control is examine the sample of the clerk's initials that was required on each duplicate sales invoices after verifying the unit selling price

]]> 2017-03-07 00:28:22 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207360 VERIFICATION https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207501 2017-03-07 00:29:35 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207501 Test of control https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207584 Kaayatihri Krishnan (01DAT15F2073)
Sharmila Murugan (01DAT15F2066)

* Consist of test designed in purpose to achieve confidence level appropriately on effectiveness or internal control as auditor relies on it.
* Test of internal control features and procedures to ascertain the authenticity and reliability of the accounting books and records.
* Consists of of procedures directed towards testing the operating effectiveness of controls,
* For instance, examining invoices to verify the documents that received and proof of delivery attached.
* Test of control consists of procedures directed towards testing the operating effectiveness of controls.
* Includes obtaining audit evidence about how controls were applied, the consistency of the controls were applied.

]]> 2017-03-07 00:30:13 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207584 Weakness Test https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207596 Malini D/O Ravi Chandran
(01DAT15F2036)
Kayathri D/O Parameshwaran
(01DAT15F2057)

Purpose: to establish whether material errors have in fact occurred (if they have, auditor will take necessary action to ensure that an adequate level of assurance is attained or an extended program of work on the verification of associated asset will be carried out).

Only carried out in areas where material error could occur.

If the compliance test reveal weaknesses in the application of the system, additional tests (weakness test) that may be necessary to establish the extent of the weaknesses and their effect on the reliability of the accounting records.
- Auditor will take necessary actions to ensure that adequate and between level of assurance is attained.

]]> 2017-03-07 00:30:16 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207596 https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207601 Dassmond 01DAT15F2064
Rinesha 01DAT15F2045]]> 2017-03-07 00:30:18 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207601 SUBSTANTIVE TEST/PROCEDURES https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207647
SHARMILA RAJAMANY
(01DAT15F2078)
ANUSIA RAJAMOHAN
(01DAT15F2035)

* Detect material misstatement(monetary errors) in a transaction class, account balances and disclosure component of the financial statement.
* Those activities performed by auditors to evaluate/verify the correctness the monetary amount in client's transaction.
*Designed to provide evidence about to fair presentation of management's assertion in the financial statement .
THERE ARE 2 CATEGORIES:
>Test of details of classes of transaction,account balances and disclosure.
>Substantive analytical procedure.]]> 2017-03-07 00:30:47 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207647 VERIFICATION https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207708 Natashya Ilyana Bt Othman (01DAT15F2051)
Fazillawaty Bt Mohd Daud
(01DAT15F2047)
-Auditors are normally required to see that the supporting document are verified in auditing
-Normally done by nominated person in the company which involves reviewing,inspecting and checking to ensure that the documents confirm to specific requirements.
-On other hand,another physical verification is done by auditor themselve.
-Substantive audit procedure that deals with examination of balance sheet.
-PROCEDURE: An auditor inspect the actual asset of company to make sure that they are same with the written record.
-The verification process confirm the ownership,existence,valuation,presentation of assets and liabilities in the balance sheet.
-Usually deals with the final balance in the final accounts.]]> 2017-03-07 00:31:13 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207708 Substantive test/ procedures https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207729 Nabila Husna bt Dzulkifli 1DAT15F20]]> 2017-03-07 00:31:30 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207729 Rotational Test https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207808 2017-03-07 00:32:05 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207808 Rotational test https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207842 *Muhammad norhafiy irfan 01DAT15F2046
*Siti Aminah binti Ahmad raside
01DAT15F2068

Rotational test
-An idea of adequacy of the internal control system can be obtained from the previous year's audit.

-Auditor needs to consider whether there is a need to carry out rotational tests and whether they should performed on the selected areas only.

-This technique is useful where the client company has large number of departments or branches.

-Help to improve audit efficiency

]]> 2017-03-07 00:32:27 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158207842 Substantive test/ procedures https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158208019 Prepared by :
Nabila Husna bt Dzulkifli 01DAT15F2024
Cik Naziera bt Ahmad Afandi 01DAT15F2039

- Performed by auditors to evaluate/verify the correctness the monetary amount in client's transactions.
- Detect material misstatement ( monetary errors) in a transaction class, account balances and disclosure component of the financial statement.
THERE ARE 2 CATEGORIES:
💠 Test of detail of classes of transactions, account balances and disclosure.
↪Test for errors or fraud in individual transactions.
↪Test the details of account balances and disclose in the financial statement.
↪E.g the auditor may verify the account payable, to verify the details of the account payable balance, the auditor can examine a sample of the individual suppliers invoices that make up the year end balance in account payables.
💠Substantive analytical procedure.
↪Analytical procedures enable auditors to identify numerical relationships and trends among financial data.
↪Use of comparisons and relationship to assess whether account balances or other data appear reasonable.
↪E.g An auditor may note that a companys expenses averaged 50 percent of total sales over the last five years.
]]> 2017-03-07 00:33:50 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158208019 Vouching https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158210393 Dassmond George S/O
Joanson @ Johnson (01DAT15F2064)
Rinesha Jeyakumaran (01DAT15F2045)

]]> 2017-03-07 00:54:40 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158210393 Diviya Kannan (01dat15f2034) Mishalini Devi Selvarajah (01dat15f20 dkannan693 https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158212237 2017-03-07 01:06:25 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158212237 ROTATIONAL TEST https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158212882 Nur Fatihah Binti Khairudin 01DAT15F2059
Santhiya 01DAT15F1055]]> 2017-03-07 01:10:18 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158212882 VOUCHING https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158219367 Ramya Piriya a/p Krishnan
Sharmila a/p Thulasedass

Definition: vouching is defined as the verification of entries in the book of account by examination of documentary evidence or vouchers.

Objective of vouching
1. To detect errors and frauds
2. To know the truth of account
3. To find the unrecorded transactions.
4. To know that all the transactions are authorized
5. To know that only the business transactions are recorded

]]> 2017-03-07 02:01:13 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158219367 Walk through twst https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158220662 Thaarsini a/p Seevaraman
(01dat15f2041)
Kogilavani a/p Balakrishnan
(01dat15f2055)

What is walk through test?
A walk through test is a procedure under financial audit performed by auditor The purpose of walk through test is for the auditor to establish the reliability of a client's accounting and internal control procedure walk through test can not be considered test of controls.
What is the purpose of walk through test?
The purpose of walk-through tests is for the auditors to establish the reliability of a client's accounting and internal control procedures, Walk-through tests can not be considered tests of controls.]]> 2017-03-07 02:15:50 UTC https://padlet.com/mdfauzimail/vncycucwjn7e/wish/158220662