Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
FIGURE 19 - 2
Manufacturing Equipment and Related Accounts
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
FIGURE 19 -3
Prepaid Insurance and Related Accounts
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
The following audit procedures should be
performed only when there is a special
reason for doing so.
Insurance Policies in the Prepaid Insurance
Schedule Exist and Existing Policies
Are Listed (Existence and completeness)
The Client Has Rights to All Insurance Policies
in the Prepaid Insurance Schedule (Rights)
Prepaid Amounts on the Schedule Are Accurate
and the Total Is Correctly Added and Agrees
With the General Ledger
(Accuracy and Detail Tie-in)
Continued
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
The Insurance Expenses Related to
Prepaid Insurance Is Properly
Classified (Classification)
Insurance Transactions Are Recorded in
the Proper Period (Cutoff)
Prepaid Insurance Is Properly Presented and
Disclosed (Presentation and Disclosure)
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
AUDIT OF
ACCRUED LIABILITIES
Accrued income taxes
Accrued interest
Accrued pension costs
Accrued professional fees
Accrued rent
Accrued warranty costs
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
FIGURE 19 - 5
Accrued Property Taxes and Related Accounts
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Audit of
Income and
Expense
Accounts
Approach to
Auditing Income
and Expense
Accounts
Analytical
Procedures
Tests of controls
and Substantive
Tests of
Transactions
Tests of
Details of
Account Balances
Audit
Report
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Accrued liabilities
allocation
Expense account analysis
Fixed asset master file
Insurance register
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
BALANCE-RELATED AUDIT OBJECTIVES
UTILITIES EXPENSE
Recorded utilities expense transactions
as listed exist
Existing utilities services received are recorded
Utilities expense transactions as listed are
correctly stated
Utilities expense transactions as listed are
properly classified
Arens,Loebbecke; Auditing,8/E
2000 Prentice Hall,Inc.
Utilities expense transactions are recorded
in the proper period
The amounts in the general ledger are
correctly totaled and the total agrees
with the trial balance
Utilities expense is properly presented
and disclosed
BALANCE-RELATED AUDIT OBJECTIVES
UTILITIES EXPENSE
(continued)