Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
OVERALL AUDIT
PLAN AND AUDIT
PROGRAM
HOW MUCH AND WHAT KIND
OF TESTING WILL GET
THE JOB DONE?
12
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Procedures to obtain an
understanding of internal control
Test of controls
Substantive tests of transactions
Analytical procedures
Tests of details of balances
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Procedures
to obtain an
understanding of
internal control
Tests of
controls
Substantive
tests of
transactions
Analytical
procedures
Sufficient
competent
evidence
per GAAS
Tests of
details of
balances+ + + + =
Audit Risk
Model
Types
of Audit Tests
AAR
IR X CR = PDR
Figure 12 - 1 Types of Tests and the Audit Risk Model
DPT’s
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
TABLE 12 - 2
Relationship between Types of Tests and Evidence
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
E = Extensive amount of testing; M= medium amount of testing;
S = small amount of testing; N = no testing.
TABLE 12 - 3
Variations in Evidence Mix
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
FIGURE 12 -6
Role of All Audit Tests in the Audit of the Sales and Collection Cycle
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
FIGURE
12 - 7
Audit Assurance from Substantive Tests and Tests of Controls
at Different Levels of Internal Control Effectiveness
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
FIGURE 12 - 13
Summary of the
Audit Process
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
FIGURE 12 - 8
Methodology for
Designing Tests of
Controls and
Substantive Tests of
Transactions
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
FIGURE 12 - 10
Methodology for
Designing Tests of
Details of
Balances-Accounts Receivable
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Figure 12 - 11
Approach to Designing Tests of Details of Balances
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Phase I,Plan and Design an Audit Approach
Phase II,Perform Tests of Controls and
Substantive Tests of Transactions
Phase III,Perform Analytical Procedures and
Tests of Details of balances
Phase IV,Complete the Audit and Issue an
Audit Report
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Review for Contingent Liabilities
Review for Subsequent Events
Accumulate Final Evidence
Issue Audit Report
Communicate with Audit
Committee and Management
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Analytical procedures
Evidence mix
Phases of the audit process
Procedures to obtain an
understanding of
internal control
Substantive tests
Substantive tests of
transactions
Tests of controls
Tests of details of balance
Types of tests