Timing of an audit procedure refers to
when it is performed
, or the period or date to which the audit evidence applies. … Extent of an audit procedure refers to the quantity to be performed, for example, a sample size or the number of observations of a control activity.
What is nature timing and extent in audit?
nature, timing, and extent are
responsive to the assessed risks of material
.
misstatement at
the relevant assertion level. The purpose is to provide a clear. linkage between the nature, timing, and extent of the auditor’s further audit. procedures and the risk assessments.
What is nature of audit procedures?
The nature of an audit procedure refers to its purpose
(that is, test of controls or substantive procedure)
and its type (that is, inspection, observation, inquiry, confirmation, recalculation, reperformance, or analytical procedure).
What do internal auditors mean when they refer to the nature extent and timing of audit procedures?
The extent of audit procedures pertains to
how much audit evidence
the internal auditor must obtain to achieve his or her objectives (sufficiency). The timing of auditor procedures pertains to when the tests are conducted and the period of time covered by the tests.
What is meant by nature of audit?
The nature of audit evidence refers to
the form of the evidence you’re looking at during the audit
. It should include all accounting documents and may include other available information, such as the minutes of the board of directors meetings.
What is the nature of substantive procedures?
The nature of substantive tests refers to
the type and effectiveness of the auditing procedures to be performed
. When the acceptable level of detection risk is low, the auditor must use more effective and usually more costly procedures.
What are the audit procedures?
- Classification testing. Audit procedures are used to decide whether transactions were classified correctly in the accounting records. …
- Completeness testing. …
- Cutoff testing. …
- Occurrence testing. …
- Existence testing. …
- Rights and obligations testing. …
- Valuation testing.
What is the extent of audit procedures?
Extent of an audit procedure refers to
the quantity to be performed
, for example, a sample size or the number of observations of a control activity.
How can audit risk be reduced?
- Perform proper audit planning before executing audit procedures.
- Design suitable audit procedures that respond to the assessed risk.
- Properly allocate staff based on their skills and experiences.
- Have proper monitoring and supervision of audit work.
What are the 7 audit assertions?
Companies must attest to assertions of
existence, completeness, rights and obligations, accuracy and valuation, and presentation and disclosure
.
What is permanent and current audit file?
Current audit files contain
information that relates to a specific audit engagement
. … Permanent audit files include information that concerns the organizational and legal structure of a client. Current files consist of information relating to correspondences, planning process, audit programmers, accounting records, etc.
Which of the following is a type of audit procedure?
Typically, five types of audit procedures normally use by auditors to obtain audit evidence. Those five audit procedures include
Analytical review, inquiry, observation, inspection, and recalculation
.
Who should internal auditors report to?
Internal auditors of publicly traded companies in the United States are required to report functionally to
the board of directors directly
, or a sub-committee of the board of directors (typically the audit committee), and not to management except for administrative purposes.
What is nature and scope of audit?
Audit scope, defined as
the amount of time and documents which are involved in an audit
, is an important factor in all auditing. The audit scope, ultimately, establishes how deeply an audit is performed. It can range from simple to complete, including all company documents.
What is the nature and purpose of audit?
The objective of an audit is
to enable the auditor to express an opinion as to whether the financial statements are prepared
, in all material respects, in accordance with an identified financial reporting framework. It is management’s responsibility to prepare the financial statements.
What is the main purpose of an audit?
The purpose of an audit is to
provide an objective independent examination of the financial statements
, which increases the value and credibility of the financial statements produced by management, thus increase user confidence in the financial statement, reduce investor risk and consequently reduce the cost of capital …
