P7 mnemonics For management assertions we already know that ACCA COVER but further classifying them into Transactions , Accounts, Presentation & Disclosures T A P 1. Transactions: ACCA CO (to remember it is ACCA Company) Authorization — all transactions were properly authorized Cutoff — the transactions have been recorded in the correct accounting period Classification — the transactions have been recorded in the proper accounts Accuracy — the transactions were recorded at the appropriate amounts Completeness — all transactions that should have been recorded have been recorded Occurrence — the transactions actually took place 2. Accounts: RECV (short form of Receiving) Rights and Obligations — the entity holds or controls the rights to its assets and owes obligations to its liabilities Existence — assets, liabilities and equity balances exist Completeness — all assets, liabilities and equity balances that should have been recorded have been recorded. Valuation and Allocation — assets, liabilities and equity balances are included in the financial statements at appropriate amounts and any resulting valuation or allocation adjustments are appropriately recorded. 3. Presentation and disclosure: ( CAR CO) ie CAR Company Classification and Understandability — financial statements are appropriately presented and described, and information in disclosures are clearly expressed. Accuracy and Valuation — financial and other information is disclosed fairly and at appropriate amounts. Rights and Obligations — the transactions pertained to the entity Completeness — all disclosures that should have been included in the financial statements have been included Occurrence — the transactions have occurred ACCA COVER for Audit Assertions A = Accuracy C = Completeness C = Classification A = Allocation C = Cut off O = Occurrence V = Valuation E = Existence R = Rights & Obligations ? CAIRO C=confirmation A=analytical procedures I=inspection of assets/records R=recalculation/reperformance O=observation ? ASTOP for control objectives in general can use A-Accuracy S- Safeguarding asset T-Timing Reporting O- Orderly efficient business conduct P- Prevention fraud or non compliance of law ? POPCI -fundamanetal principles P-rofessional behaviour O-bjectivity P-rofessional competence and due care C-onfidentiality I-ntegrity ? PRADA Mnemonic for Audit Opinion Implication P-roper accounting records have been kept R- all returns adequate to the audit have been received from branches not visited A- all explanations and information have been received from the officers D- irectors report is consisent with the f/s and directors remun. and all other benefits hvae been properly disclosed A-ccounting records are consistent with the fs ? ? SPAM SOAP Internal Controls S – segregation of duties P – physical controls A – authorization and approval M – management controls S – supervisory controls O – organization as a control A – arithmetical and accounting controls P – personnel controls ? INSIDE A CRAB UK Combined code… I=Internal audit – essential 4 listed co. N=Nomination comitee – sub commitee of main board S=Shareholders I=Internal controls – sound system of int controls (Turnbull) D=Disclosure of compliance and non compliance E=Effective board – through continuous training, regular meetings A=Audit commitee – main C=Chairman & Ceo roles distinguished seperatly R=Remeneration commitee made up of @ least 3 NEDs A=Accounting B-Balanced Board – between exec & non exec directors ? ACCAMAPS A= Authorisation C= Comparison C= Computer Controls A= Arithematic Controls M= Maintaining a trial balance & Control A =Accounting & Reconciliations P =Physical Controls S=Segregation of duties ? PAIDSAP P= Pre-numbering A= Authorisation I= Independent Checks Documentation S =Segregation of Duties A =Analysis & Performance Analysis P=Physical Control ? MARKSAT for steps in an audit plan/ strategy M=Materiality Levels A=Analytic Procedures- Ratios R=Risk (Audit)-Ir X Cr X Dr K=Knowledge Of Business S=Staffing- Number And Skills Required. A=Audit Approach- Procedural Or Risk Based T=Timing- After Year End. ? FAT SIS threats to auditor’s independence F=Financial A=Advocacy T=Threats S=Self Review I=Intimidation S=Self Interest ? A,E,I,O,U i.e. vowels (Audit Procedures) A=Analytical procedures E=Enquiry I=Inspection O=Observation U= recalcUlation and reperformance ? CACSO Audit stages C=Client acceptance/retention stage A=Audit planning stage C=Control testing stage* S=Substantive testing stage O=Opinion formulation stage * only applicable where the audit approach includes reliance on one or more control procedures. ? PEEDO Audit Activities P=Planning E= Evidence gathering E= Evidence evaluation D= Decision making O= Other activities (delegation, supervision and review- required continious throughout the audit engagement) ? Ethical Threats – SIA FS S = Self Review I = Intimidation A = Advocacy F = Familiarity S = Self Interest Threats ? Matters to consider in Appointments – FOC IRR F = Fees O = Others services C = Competence & Due Care I = Independence R = Resources R = Risk Audit Risk = IR x CR x DR IR = Inherent Risk CR = Control Risk DR = Detection Risk ? Understanding a Business “INOM” I – information System N – Nature of Business O – Objective/Strategies/Risk M – Measuring Performance ? Evaluation of Tender- FPPP F= Fee P= Professionalism P= Proposed approach P= Personal service ? Contents of Tender WW ROCE Who we R: History, portfolio, group structure, Senior profile What we Offer: Services etc. What we Charge: quote fee exactly. What we Expect: Client Responsibility. ? Facts that auditor has to consider before acceptance: LIST Logistics: deadline of AGM, location, staff availability, clients mangt(risk attached with client). Information Tech: Software, ERP (used by client) Subsidiary Report: What kind of reports required. Timings: Timing of procedures, test of control and Substantive Procedure. ? Matters to Consider before accepting PFI PINED Period covered by the PFI Intended user Nature of assumption Element of PFI Distrubutories
Posted on: Wed, 28 May 2014 20:20:09 +0000
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