Chapter 11: The Impact of Information Technology on the Audit Process
Objectives
After studying this chapter, you should be able to:
- Describe how IT improves internal control.
- Identify risks that arise from using an IT-based accounting system.
- Explain how specific types of general controls and application controls reduce risks associated with using IT-based accounting systems.
- Describe how the strength of general controls affects the auditor's testing of application controls.
- Use test data, parallel simulation, and embedded audit module approaches when auditing through the computer.
- Identify issues for environments involving microcomputers, networks, database management systems, and outsourced computer service centers.
Chapter 12: Overall Audit Plan and Audit Program
Objectives
After studying this chapter, you should be able to:
- Use the five types of audit tests to determine whether financial statements are fairly stated.
- Select the appropriate types of audit tests.
- Understand the concept of evidence mix and how it should be varied in different circumstances.
- Design an audit program.
- Compare and contrast transaction-related audit objectives and balance-related audit objectives.
- Integrate the four phases of the audit process.
Chapter 13: Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions
Objectives
After studying this chapter, you should be able to:
- Identify the accounts and the classes of transactions in the sales and collection cycle.
- Describe the business functions and the related documents and records in the sales and collection cycle.
- Understand internal control and design and perform tests of controls and substantive tests of transactions for sales.
- Apply the methodology for controls over sales transactions to controls over sales returns and allowances.
- Understand internal control and design and perform tests of controls and substantive tests of transactions for cash receipts.
- Apply the methodology for controls over the sales and collection cycle to write-offs of uncollectible accounts receivable.
- Develop an integrated audit plan for the sales and collection cycle.
Chapter 14: Audit Sampling for Tests of Controls and Substantive Tests of Transactions
Objectives
After studying this chapter, you should be able to:
- Explain the concept of representative sampling.
- Distinguish between statistical and nonstatistical sampling and between probabilistic and nonprobabilistic sample selection.
- Select representative samples.
- Define and describe audit sampling for exception rates.
- Use nonstatistical sampling in tests of controls and substantive tests of transactions.
- Define and describe attributes sampling and a sampling distribution.
- Use attributes sampling in tests of controls and substantive tests of transactions.
- Apply sampling concepts and methodology to the audit plan for the sales and collection cycle.
Chapter 15: Completing the Tests in the Sales and Collection Cycle: Accounts Receivable
Objectives
After studying this chapter, you should be able to:
- Describe the methodology for designing tests of details of balances using the audit risk model.
- Design and perform analytical procedures for accounts in the sales and collection cycle.
- Design and perform tests of details of balances for accounts receivable for each balance-related audit objective.
- Obtain and evaluate accounts receivable confirmations.
- Design audit procedures for the audit of accounts receivable, using an evidence planning worksheet as a guide.
