1. OVERALL AUDIT PLAN AND AUDIT PROGRAM
CHAPTER 10
OVERALL AUDIT PLAN AND AUDIT PROGRAM

2. TYPES OF TESTS PROCEDURES TO OBTAIN UNDERSTANDING OF INTERNAL CONTROL
INQUIRIES OF CLIENT
READ POLICY AND PROCEDURES MANUALS
EXAMINE DOCUMENTS
OBSERVE PERSONNEL
TESTS OF CONTROL
REPERFORM PROCEDURES
WAS PROCEDURE PERFORMED?
WAS IT PERFORMED CONSISTENTLY
WHO PERFORMED IT?

3. SUBSTANTIVE TESTS OF TRANSACTIONS
TEST FOR DOLLAR MISSTATEMENT
SATISFY ALL SIX TRANSACTION-RELATED OBJECTIVES FOR EACH CLASS OF TRANSACTIONS
RECORED SALES OCCURRED
RECORDED SALES ARE COMPLETE
RECORDED SALES ARE ACCURATE
RECORDED SALES ARE IN CORRECT TIME PERIOD
RECORDED SALES ARE PROPERLY CLASSIFIED
RECORDED SALES ARE ACCURATELY SUMMARIZED
ANALYTICAL PROCEDURES
COMPARISONS OF DATA
FOUR PURPOSES

4. TESTS OF DETAILS OF BALANCES
FOCUS ON ENDING G/L BALANCES
EXTENT DEPENDENT ON RESULTS OF OTHER TESTS
TESTS OF CONTROL
ANALYTICAL PROCEDURES
TESTS OF TRANSACTIONS
SUMMARY OF TYPES OF TESTS
CONTROL RISK ASSESSMENT
LOWER DETECTION RISK

5. RELATIONSHIP BETWEEN TESTS AND EVIDENCE
RELATIVE COSTS
ANALYTICAL PROCEDURES
PROCEDURES TO OBTAIN UNDERSTANDING OF I/C AND TESTS OF CONTROL
SUBSTANTIVE TESTS OF TRANSACTIONS
TESTS OF DETAIL OF BALANCES
RELATION BETWEEN TESTS OF CONTROL AND SUBSTANTIVE TESTS
DEVIATION FROM CONTROL INCREASES RISK OF DOLLAR ERROR

6. EVIDENCE MIX TRADE OFF BETWEEN TESTS OF CONTROL AND SUBSTANTIVE TESTS
FIGURE 10-4
ANALYSIS OF AUDITS 1 TO 4 ON PAGES

7. DESIGN AUDIT PROGRAM
TESTS OF CONTROL AND SUBSTANTIVE TESTS OF TRANSACTIONS
FOUR STEPS
APPLY TRANSACTION-RELATED OBJECTIVES
IDENTIFY SPECIFIC CONTROLS TO REDUCE RISK
DEVELOP TESTS OF CONTROL
DESIGN SUBSTANTIVE TESTS OF TRANSACTIONS FOR POTENTIAL MISSTATEMENTS
CONSIDER CONTROL RISK ASSESSMENT

8. ANALYTICAL PROCEDURES
AUDITOR JUDGMENT
INDUSTRY-SPECIFIC PROCEDURES
TESTS OF DETAIL OF BALANCES
SET MATERIALITY LEVEL, ACCEPTABLE AUDIT RISK, AND ASSESS INHERENT RISK
ASSESS CONTROL RISK
DESIGN TESTS OF BALANCES FOR EACH BALANCE-RELATED OBJECTIVE
RELATION OF AUDIT OBJECTIVES
TABLE 10-5

9. SUMMARY OF AUDIT PROCESS
PHASE I
PLAN AUDIT
DESIGN APPROACH
PHASE II
PERFORM TESTS OF CONTROLS
PERFORM TESTS OF TRANSACTIONS
PHASE III
PERFORM ANALYTICAL PROCEDURES
PERFORM TESTS OF BALANCES
PHASE IV
COMPLETE AUDIT AND ISSUE REPORT