AUE3702 ASSIGNMENTPACK Semester

TOPIC 2 SUBSTANTIVE PROCEDURES: THE CONCEPTS LEARNING UNIT 2.1 PRINCIPLES IN FORMULATING SUBSTANTIVE PROCEDURES REFLECTAND DISCUSS: → Yes, I am able to differentiate between transactions and balances. → No I do not know the assertions off my heart for transactions or events, or for account balances, I will need to spend more time on studying and learning them to ensure I know them very well for the examination. → I know most of them off by heart but will require more time in studying these assertions. → The assertions differ from one other as they are two separate things which need to be dealt with individually and within their own way, the assertions are different because you evaluate transactions and account balances on different levels and therefore different assertions will be applicable for the understanding of the auditor. → Yesthey can be relevant as the transactions are what eventually make up the total of the account balances. ACTIVITY 2.1.1. 1) The trainee's understanding of the assertions is very limited. Evaluating the different accounts separately: Accounts receivable: → Existence: This assertion is correct.( MARK-added more detail) → Accuracy: This assertion applied is incorrectly to accounts receivable.(MARK-defined to what this assertion applies) → Completeness: to a degree the trainee is correct, it applies that all accounts receivable are included but doesn’t concern whether the debtor is able to pay or not, it focuses more specifically on the information that is supplied that it is completely supplied in all essence. →Obligation: This assertion does not apply to accounts receivable.(MARK-specified to what is applies and elaborated to what it applies) Account: Sales: → Materiality: This isn’t an assertion. (MARK-specified that it is an auditing concept) → Cut off: Correct to a degree. More specifically it means all sales figures have been Recorded in the relevant year.(MARK-provided explanation incorporated with scenario) → Validity: This isn’t an assertion. (Mark-stated that this in an internal control objective and that the trainee could be confusing this with occurrence). 2) The correct assertions Accounts Receivable: → Existence → Rights and Obligations → Completeness → Valuation and allocation Accounts: Sales: → Occurrence → Completeness → Accuracy → Cut-off → Classification Reflection on activity: After reviewing the suggested solution I have found that I have not applied my answers to all the relevant points of the question and integrated them according with the question. I will need to rectify this by being more cautious in how I set out my answer and ensure that I apply it and integrate it with the question. I could have also given more relevant details with the assertions and the effects of the assertions in conjunction with the scenario given. LEARINING UNIT 2.3 ANALYTICAL PROCEDURE