ENGLISH FOR AUDITING Outlines 3.1 Basic Auditing (Các vấn đề chung kiểm toán) 3.2 Techniques in Collecting Audit Evidence (Các kỹ thuật thu thập chứng kiểm toán ) 3.3 Types of Audit Tests (Thử nghiệm kiểm toán) 3.4 Internal Control (Kiểm soát nội bộ) 3.5 Audit of Items in Financial Statements and Business Cycles (Kiểm toán khoản mục báo cáo tài chu trình kinh doanh) 3.1 Basic Auditing 3.1.1 Nature of Auditing Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria Auditing should be done by a competent, independent person Information and Established Criteria To an audit, there must be information in a verifiable form and some standards (criteria) by which the auditor can evaluate the information FASB Criteria IASB Accumulating Evidence and Evaluating Evidence Evidence is any information used by the auditor to determine whether the information being audited is stated in accordance with the established criteria Transaction data Client Testimony Written and electronic Communications with outsiders Observations Competent, Independent Person Judgment and Experience Competence Independence Evaluation of Evidence Proper Conclusion 3.1.2 Types of Audits and Types of Auditors Types of Audits Operational Audit Compliance Audit Audit of Financial Statement Operational Audit Example Evaluate computerized payroll system for efficiency and effectiveness Information Number of records processed, costs of the department, and number of errors Established Criteria Company standards for efficiency and effectiveness in payroll department Available Evidence Error reports, payroll records, and payroll processing costs 10 Relationships Among Transaction Cycles General cash Capital acquisition and repayment cycle Sales and collection cycle Acquisition and payment cycle Payroll and personnel cycle Inventory and warehousing cycle 86 Audit of the Sales and Collection Cycle 87 Overview of Accounts in the Sales and Collection Cycle Sales Cash sales Sales on account Cash in Bank Accounts Receivable Beginning Cash receipts balance Cash Discounts Taken Sales on account Sales returns and allowances Sales Returns and Allowances Ending balance Charge-off of uncollectible accounts Bad Debt Expense 88 Accounts in the Sales and Collection Cycle Accounts Receivable Beginning Cash receipts balance Sales on account Sales returns and allowances Ending balance Charge-off of uncollectible accounts Allowance for Uncollectible Accounts Charge-off of Beginning uncollectible balance accounts Estimate of bad debt expense Bad Debt Expense Ending balance 89 Business functions Processing Customer Orders Granting Credit Shipping Goods Billing Customers and Recording Sales Processing and Recording Cash Receipts Processing and Recording Sales Returns and Allowances Charging Off Uncollectible Accounts Receivable Providing for Bad Debts 90 Sales Transaction Accounts  Sales  Accounts receivable Business functions  Processing customer orders  Granting credit  Shipping goods  Billing customers and recording sales Documents and records  Customer order  Sales order  Customer order or sales order  Shipping document  Sales invoice  Sales transaction file  Sales journal or listing  Accounts receivable master file  Accounts receivable trial balance  Monthly statements 91 Cash Receipts Transaction Accounts  Cash in bank (debits from cash receipts)  Accounts receivable Business functions  Processing and recording cash receipts Documents and records Remittance advice  Prelisting of cash receipts  Cash receipts transaction file  Cash receipts journal or listing 92 Sales Returns and Allowances Transaction Accounts  Sales returns and allowances  Accounts receivable Business functions  Processing and recording sales returns and allowances Documents and records  Credit memo  Sales and returns and allowances journal 93 Charge-off of Uncollectible Accounts Transaction Accounts Business functions  Accounts  Charging off receivable uncollectible  Allowance for accounts uncollectible receivable accounts Documents and records  Uncollectible account authorization form  General journal 94 Bad Debt Expense Transaction Accounts  Bad debt expense Business functions Documents and records  Providing for bad  General journal debts  Allowance for uncollectible accounts 95 Methodology for Designing Controls and Substantive Tests of Sales Transactions for Sales Understand internal control – sales Assess planned control risk – sales Determine extent of testing controls Design tests of controls and substantive tests of transactions for sales to meet transaction -related audit objectives Audit procedures Sample size Items to select Timing 96 Transaction-Related Audit Objectives for Sales Existence Recorded sales are for shipments actually made Completeness Existing sales transactions are recorded Accuracy Recorded sales are for the amount shipped Classification Sales transactions are properly classified Timing Sales are recorded on the correct dates Posting and Sales transactions are properly included in the summarization accounts receivable master file 97 Direction of Tests for Sales Customer order Shipping document Completeness start Duplicate sales invoice Sales journal Accounts General = receivable journal master file Existence start 98 Types of Audit Tests for the Sales and Collection Cycle Accounts Receivable Sales Cash in Bank Sales transactions Cash receipts transactions Audited by TOC, STOT, and AP Audited by TOC, STOT, and AP Ending balance Ending balance Audited by AP and TDB TOC + STOT + AP + TDB = Sufficient competent evidence per GAAS 99 “Thank you for your attention!” Love what you do! 100 ... Basic Auditing 3.1.1 Nature of Auditing Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information... established criteria Auditing should be done by a competent, independent person Information and Established Criteria To an audit, there must be information in a verifiable form and some standards... auditor can evaluate the information FASB Criteria IASB Accumulating Evidence and Evaluating Evidence Evidence is any information used by the auditor to determine whether the information being audited