1. Audit Procedures
Audit procedure are used by auditors to determine
the quality of the financial information being provided
by their clients . exact procedures used will vary by
client , depending on the nature of the business and
the audit assertions that the auditor want to prove .
Here are some general classifications of audit
procedure :
2. Classification Testing
audit procedures
are used to decide weather transactions were
classified correctly in the accounting records
For example,
purchase record of fixed assets
can be reviewed to see if they were correctly
classified within the right fixed asset account
3. Completeness testing
Audit procedure can test to see if any transction
are missing from the accounting records
For example ;
if any payments to suppliers were
not be records in the book , or if cash receipts
from customers were not recorded
4. Cutoff testing
• Audit procedure are used to determine
weather the transactions have been recorded
within correct reporting period.
For example ; the shipping log can be reviewed
to see if shipments to customers on the last
day of the month were recorded within the
correct period
5. Occurrence testing
Audit procedure can be constructed to
determine wether the transaction that a client
is claiming have actually occurred.
For example ; one procedure might require the
client to show specific invoice that are listed
on the sales ledger, along with supporting
documentation such as a customer order and
shipping documentations
6. Existence testing
• Audit procedure are used to determine
whether assets exits .
• For example , the auditor can be observe an
inventory being taken , to see if the inventory
started in the accounting records actually
exists
7. Rights and obligations
• Audit procedure can be followed to see if
clients actually own all of its assets
Valuation testing
Audit procedure are used to determine the valuation at
which asset and liabilities are recoded in a clients
books are correct for example ; one porcedre would
be to check market pricing data to see if the ending
values of marketable securities are correct
