Audit: applied workshop

Financial statement assertions

Use financial statement assertions to make decisions inspectable.

Distinguish existence, completeness and cutoff scenarios.

Teaching example: Omitted liabilities concern completeness; fictitious assets concern existence.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Ledgers and trial balance

Use ledgers and trial balance to make decisions inspectable.

Check debit/credit entries and balance movements in a fictional ledger.

Teaching example: Balanced debits and credits do not rule out omissions.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Audit evidence

Use audit evidence to make decisions inspectable.

Connect each exception to evidence and unresolved questions.

Teaching example: A screenshot may omit timing, scope or original source.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Processes and controls

Use processes and controls to make decisions inspectable.

Map procure-to-pay and identify a key control.

Teaching example: One person creating suppliers and approving payments concentrates duties.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Risk and procedure matching

Use risk and procedure matching to make decisions inspectable.

Propose different procedures for omissions and overstatement.

Teaching example: Tracing into records and vouching back to documents have different directions.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Exceptions and adjustments

Use exceptions and adjustments to make decisions inspectable.

Create an exception log with original amount, proposal and evidence.

Teaching example: Investigate a difference rather than forcing balances to agree.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Workpapers and bounded conclusions

Use workpapers and bounded conclusions to make decisions inspectable.

Document purpose, inputs, steps, findings and unresolved items.

Teaching example: An educational checklist is not an audit opinion.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Worked example · fictional

From a problem to inspectable work

Synthetic audit: population book value 1.2m; a purposive high-risk sample is booked at 200,000 with support for 190,000; not random.

1. Observed discrepancy is 200000−190000 = 10000. Proportional projection of 60000 is unsupported by purposive selection.
2. Further judgment: Can the sample discrepancy rate be projected directly?
3. Inspect sampling design and misstatement nature, then extend procedures if warranted

Deliver educational reconciliation and evidence workpaper: the calculation reference is 10000; the recommendation must respect Inspect sampling design and misstatement nature, then extend procedures if warranted. Separate numbers, inference and unknowns.

Failure case and repair

In Processes and controls, copy tool output without definitions, then retain the conclusion when asked: Can the sample discrepancy rate be projected directly?

Even a result of 10000 does not explain when Inspect sampling design and misstatement nature, then extend procedures if warranted is supported.

Observed discrepancy is 200000−190000 = 10000. Proportional projection of 60000 is unsupported by purposive selection. Then test assumptions in Exceptions and adjustments.