lOMoAR cPSD| 14794705
AUDITING
288
, lOMoAR cPSD| 14794705
Audit 288
Cycles
By the end of auditing, second-year cycles will be your best friend. Find the most effective way for
yourself to understand and know the cycles off by heart. In these summaries you will find two different
ways namely - past memos (out of experience the best and simplest way to memorize them) and
theory. It’s important to practice weakness questions on cycles. If you study hard enough and practice
how to answer the questions you can do well.
Structure of the summaries regarding cycles:
• Sales & Receipts and Purchases & Payments – Theory of the cycle and then the perfect cycle
memo.
• Bank and Cash – memos are incorporated in the theory and there is a cash register overview at
the end.
• Inventory and Production – memos are incorporated in the theory and there is an extra summary
of the documents for the production cycle included at the end. Please note that the Payments &
Purchases cycle, as well as the Sales & Receipts cycle, is incorporated into this cycle and
therefore some of this cycle’s information will be a repetition of previous cycles.
• Salaries and Wages – memos are incorporated into the theory.
• Investment and Financing – was a self-study section, however, you can find typical questions
asked on this cycle at the end of the section in these summaries.
Ethics
Know this section off by heart, although it might seem impossible at first, it is manageable if you focus
on the key aspects of each section. Also, know which sections fall under which part of the act - there is
a summary of each section included.
When answering questions for Ethics:
• List the threats
• List 4 factors
• Apply these factors to the scenario
• Make a conclusion about the significance of the threat
See at the end of the section some useful memos and an overview of all the sections.
Audit risk
Use factors listed in the table as a guideline, note that there may be others and therefore it is important
to practice questions to make it easier to identify risks.
Audit materiality
Theory and memos are included at the end of the section in these summaries, you can memorise the
memo to help you answer questions.
Overall audit approach
Study memos at the end of the section.
HEBREWS 11:1
, lOMoAR cPSD| 14794705
Table of Contents
TERM 1
1. Introduction and background
2. Internal control and introduction to cycles
3. Revenue and receipts cycle
4. Purchases and payment cycle
TERM 2
5. Bank and cash cycle
6. Inventory and production cycle
7. Salaries and wages cycle
8. Investment and financing cycle
9. Ethics: Rules of improper conduct & Auditing profession act
TERM 3
10. Ethics: Code of professional conduct
11. Pre-engagement activities
TERM 4
12. Audit risk
13. Audit materiality
14. Overall audit approach
15. Audit evidence
, lOMoAR cPSD| 14794705
1. INTRODUCTION AND BACKGROUND
Auditor
• Satisfy himself to the truth of bookkeeping of others.
• Must remain independent. (NB!)
Duties and responsibilities of an auditor
• To communicate opinion;
• to investigate annual financial statements;
• to ensure that appropriate accounting records have been kept in accordance
with the Company’s requirements
• that minute books and attendance registers in respect of company, directors’
and managers’ meetings have been kept in the appropriate form as required
by the Companies Act
• to acquire all the information and explications that to his knowledge and
conviction are necessary for the purpose of the performance of duties;
• to ascertain that annual financial statements agree with his accounting
records and accounts;
• to investigate accounting records of company and to perform tests and other
audit procedures he finds necessary to ensure that annual financial
statements
• reasonably reflect the financial position of the company and
• the results of its operations - in accordance with generally accepted
accounting practice, applied on a basis that is compatible with that of the
previous year;
• directors’ report: is not in breach of or its meaning distorted with a reasonable
interpretation of the annual financial statements and accompanying notes;
• to adhere to any appropriate requirements of the Auditing Profession Act at all
times.
AUDITING
288
, lOMoAR cPSD| 14794705
Audit 288
Cycles
By the end of auditing, second-year cycles will be your best friend. Find the most effective way for
yourself to understand and know the cycles off by heart. In these summaries you will find two different
ways namely - past memos (out of experience the best and simplest way to memorize them) and
theory. It’s important to practice weakness questions on cycles. If you study hard enough and practice
how to answer the questions you can do well.
Structure of the summaries regarding cycles:
• Sales & Receipts and Purchases & Payments – Theory of the cycle and then the perfect cycle
memo.
• Bank and Cash – memos are incorporated in the theory and there is a cash register overview at
the end.
• Inventory and Production – memos are incorporated in the theory and there is an extra summary
of the documents for the production cycle included at the end. Please note that the Payments &
Purchases cycle, as well as the Sales & Receipts cycle, is incorporated into this cycle and
therefore some of this cycle’s information will be a repetition of previous cycles.
• Salaries and Wages – memos are incorporated into the theory.
• Investment and Financing – was a self-study section, however, you can find typical questions
asked on this cycle at the end of the section in these summaries.
Ethics
Know this section off by heart, although it might seem impossible at first, it is manageable if you focus
on the key aspects of each section. Also, know which sections fall under which part of the act - there is
a summary of each section included.
When answering questions for Ethics:
• List the threats
• List 4 factors
• Apply these factors to the scenario
• Make a conclusion about the significance of the threat
See at the end of the section some useful memos and an overview of all the sections.
Audit risk
Use factors listed in the table as a guideline, note that there may be others and therefore it is important
to practice questions to make it easier to identify risks.
Audit materiality
Theory and memos are included at the end of the section in these summaries, you can memorise the
memo to help you answer questions.
Overall audit approach
Study memos at the end of the section.
HEBREWS 11:1
, lOMoAR cPSD| 14794705
Table of Contents
TERM 1
1. Introduction and background
2. Internal control and introduction to cycles
3. Revenue and receipts cycle
4. Purchases and payment cycle
TERM 2
5. Bank and cash cycle
6. Inventory and production cycle
7. Salaries and wages cycle
8. Investment and financing cycle
9. Ethics: Rules of improper conduct & Auditing profession act
TERM 3
10. Ethics: Code of professional conduct
11. Pre-engagement activities
TERM 4
12. Audit risk
13. Audit materiality
14. Overall audit approach
15. Audit evidence
, lOMoAR cPSD| 14794705
1. INTRODUCTION AND BACKGROUND
Auditor
• Satisfy himself to the truth of bookkeeping of others.
• Must remain independent. (NB!)
Duties and responsibilities of an auditor
• To communicate opinion;
• to investigate annual financial statements;
• to ensure that appropriate accounting records have been kept in accordance
with the Company’s requirements
• that minute books and attendance registers in respect of company, directors’
and managers’ meetings have been kept in the appropriate form as required
by the Companies Act
• to acquire all the information and explications that to his knowledge and
conviction are necessary for the purpose of the performance of duties;
• to ascertain that annual financial statements agree with his accounting
records and accounts;
• to investigate accounting records of company and to perform tests and other
audit procedures he finds necessary to ensure that annual financial
statements
• reasonably reflect the financial position of the company and
• the results of its operations - in accordance with generally accepted
accounting practice, applied on a basis that is compatible with that of the
previous year;
• directors’ report: is not in breach of or its meaning distorted with a reasonable
interpretation of the annual financial statements and accompanying notes;
• to adhere to any appropriate requirements of the Auditing Profession Act at all
times.
