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Step involved to determine the compliance to procedures and internal controls
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Why a business need creditors?
Why a business have creditors
How can we calculate creditors payment period?
Average Creditors / Credit purchases = '?' x 360 = '?' ex. Average Creditors / Credit purchases = 50 000 / 120 000 x 360 = 0.4166 x 360 = 41.7 (average creditors = Creditors at the biginning of the year + creditors at the end of the year divided by 2) Average Creditors / Credit purchases = '?' x 360 = '?' ex. Average Creditors / Credit purchases = 50 000 / 120 000 x 360 = 0.4166 x 360 = 41.7 (average creditors = Creditors at the biginning of the year + creditors at the end of the year divided by 2)
What is the effect of liquidation on creditors?
When a company liquidates, creditors generally receive less money than they owe. Creditors will have to write off the balance, so that their books can balance.
What do firms owe their creditors?
Firms will owe their creditors a debt and usually some type of interest.
Mention three stakeholders who would be interested in the audit reports?
mention three stakeolders that will be intrested in the audit report
Differences between audit plan and audit program?
difference between audit program audit & note book
Difference between audit plan and audit program?
an audit program may contain several audit plans
What is the Audit Work Program?
The Audit Work Program is used to inform both the government and the public about audits. In Australia, for example, they have the Australian National Audit Office.
What are the contents of Audit Program?
contents of audit program are as, 1. a review of system of internal check. 2. audit of balance sheet. 3. audit of p&l a/c. 4. the details of various audit works to be performed and their classification. 5. preparation of audit report and co-ordination of all above mentioned items.
How do you write-design an audit test that will form part of an audit program for a certain control for stolen material?
with a pencil?
Stakeholders that would be interested in an audit report?
Shareholders of the company, the directors of the company, the accountant of the company and future investors or creditors
What are two differences between an internal audit and an external audit?
1) An internal audit is an appraisal of activities within company areas, whereas an external audit looks at the financial statements as a whole 2) An internal report is normally given to managers, while an external report is prepared for shareholders, related companies, creditors, or government agencies.
What is a core certification program?
A company has a third party audit, by NBCSA this shows proof of a loss control program is in place.
What has the author Bureau of Financial Audit written?
Bureau of Financial Audit has written: 'An Analysis of Fund Balaces in the New York City Head Start Program'
Why is it important for a public company that an external audit is performed on an annual basis?
So that the public company's investors, creditors, interested regulatory entities and potential investors, creditors and regulatory entities have independent unbiased confirmation of the finances of the company on a regular basis.
What is a baseline audit in health and safety?
A baseline audit in health and safety is an audit of all or part of a health and safety program, the results of which will be used as a point of comparison (a baseline) when a future audit is performed. With a baseline audit in the record, it is possible after future audits to tell whether there have been improvements or declines in health and safety performance.
What is an audit program?
AUDIT PROGRAM COMPONENTSI. Audit Objective Development of the Audit Objectivea) Departmental objectives: Why was the department created?b) Control requirements: What controls are in place in the department to ensure its objectives are met?c) Audit Objective: Why are we auditing this department? Should be a combination of departmental objectives and control requirements.To ensure….To determine…II. Audit ScopeWhat is the Audit Scopea) Establishes parameters or boundaries for the audit b) Identifies:· Area to be audited (department or function)· Timeframe· Sample size (volume or dollars)III. Audit Program StepsGuidelines for Preparing Audit Programsa) Review audit program, if any, from prior audit. Determine what was covered, how it was covered, in what depth and with what results. b) Perform a preliminary survey to determine objectives of the operations, existing systems of internal control and apparent risks.c) Review internal audit literature which addresses the operation to be reviewed and may provide guidance to conducting the audit.d) The objectives of the operation under review should be carefully stated and agreed to by the client.e) Programs should be tailor-made to the audit assignment unless compelling reasons dictate otherwise.f) Work steps should include positive and clear instructions. They should not be stated in the form of questions.g) If possible, the audit program should indicate the relative priority of the work steps. Thus, the more important parts of the program will be completed in the allotted time.h) Audit programs should be flexible and permit the use of initiative and sound judgment in deviating from prescribed procedures. Audit supervisors should be informed promptly of major deviations.i) Programs should not be cluttered with material from sources readily available to the staff. Incorporate by reference, where feasible.j) Unnecessary information should be avoided. Include only what is needed to perform the audit work. Excessive detail wastes the time of those who prepare and read the programs.k) Audit programs should bear evidence of supervisory approval before they are carried out. Significant changes should also be approved in advance.
