JHON BRYAN M.

RAMOS # 13 BSA 4-1

SEPTEMBER 23, 2013 AUDITING THEORY

CHAPTER 4: THE AUDIT PROCESS, PRELIMINARY ENGAGEMENT ACTIVITIES 1.0 General approach in auditing financial statements 1.1 Financial statement assertions 1.2 Audit procedures 1.3 audit evidence 2.0 Financial statement assertions 2.1 Assertions about classes of transaction and events for the period under audit 2.1.1 Occurrence 2.1.2 Completeness 2.1.3 Accuracy 2.1.4 Cutoff 2.1.5 Classification 2.2 Assertions about account balance at the period end 2.2.1 Existence 2.2.2 Rights and obligations 2.2.3 Completeness 2.2.4 Valuation and allocation 2.3 Assertions about presentation and disclosure 2.3.1 Occurrence and rights and obligations 2.3.2 Completeness 2.3.3 Classification and understandability 2.3.4 Accuracy and valuation 3.0 Audit procedures 3.1 Inspection 3.2 Observation 3.3 Inquiry 3.4 Confirmation 3.5 Computation 3.6 Analytical procedures 4.0 Evidence 4.1 Refers to the information obtained by the auditor in arriving at the conclusions on which the audit opinion is based. 5.0 Overview of the audit process 5.1 Preliminary engagement activities 5.2 Audit planning 5.3 Considering internal control 5.4 Performing substantive tests 5.5 Completing the audit 5.6 Issuing a report 6.0 Preliminary engagement activities 6.1 Competence 6.2 Independence 6.3 Ability to serve the client properly 6.4 Integrity of management 6.5 Making inquiries of appropriate parties in the business community 6.6 Communicating with the predecessor auditor 7.0 Retention of existing clients

8.0 Engagement letter 9.0 Importance of the engagement letter 10.0 Recurring audits 11.0 Audits of components