Audit. Methods of economic analysis used in auditing (part 1) (most important)

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Audit. Methods of economic analysis used in auditing (part 1) (most important)

Lecture notes, cheat sheets

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29. METHODS OF ECONOMIC ANALYSIS USED IN AUDIT (Part 1)

Preparing an alternative balance. To obtain evidence of the reality and completeness of reflection in the accounting of finished products of work performed, services provided, an audit organization can draw up a balance of consumed raw materials and materials according to the standards per unit of production and the actual output of products (performance of work, provision of services). The balance of raw materials, materials and product output allows the audit organization to identify deviations from the standard consumption of raw materials and materials and product output (performance of work, provision of services) and thereby ensure the reliability of the calculation of the financial result.

Test of controls - a kind of audit procedure, which consists in checking the performance and reliability of a particular control. To do this, you can use the recommended rule (standard) "Study and evaluation of accounting and internal control systems during the audit." The auditor is obliged to evaluate the system of internal control of an economic entity at least in the following three stages:

1) general familiarity with the internal control system;

2) initial assessment of the reliability of the internal control system;

3) confirmation of the reliability of the assessment of the internal control system. Audit firms may decide to apply in their activities more stages of assessing the system of internal control than the three above, to conduct an assessment in more detail and thoroughness than prescribed in this section.

General acquaintance with the internal control system. At the beginning of its work, the audit organization should obtain a general understanding of the specifics and scale of the activities of an economic entity and its accounting system. Based on the results of the initial acquaintance, the audit organization must decide whether in its work it can generally rely on the internal control system of the economic entity being audited.

If the audit organization decides that it cannot rely in its work on the internal control system of the economic entity, it should plan the audit in such a way that the audit opinion is not based on reliance on this system. This may be done when the reliability of the internal control system is assessed by the auditor as "poor" or when it is more convenient or economically feasible for the auditor not to rely on the system. In the event that, based on the results of a general acquaintance with the internal control system of an economic entity, the audit organization decides that it can make an attempt to rely on the internal control system in its work, it should carry out an initial assessment of the reliability of the internal control system.

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