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Audit Hmwrk

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Submitted By Mg370
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Auditing I
04-16-2013
Case 10.1: Southeast Shoe Distributor, Inc.
Control Activities Matrix
In order to cover some of the presentation and disclosure-related audit objectives, we need test these in other ways than through test of transactions or controls. One of these disclosure objectives that cannot always be met through test of transactions is the Occurrence and Rights and Obligations assertion. In order to meet this assertion, I (the auditor) would use methods such as inspection; physically examining the asset if possible or observation of the process or procedure being performed in order to obtain those accounts receivable or incur the liability. I would check with a third party, who is unrelated, to verify the accounts receivable or liabilities exist (such as a bank for liability). I could also check legal documentation. I would identify the company’s business risks affecting accounts receivable or take a sample size of the accounts receivable and test them to see if they were recorded correctly and could be verified. I could also use positive confirmation of accounts receivable, blank confirmation form, or negative confirmation addressed to the debtor.
In order to cover the Accuracy and Valuation assertion, as the auditor, I would test the details of balances. I would recalculate figures, check documentation to make sure the liabilities etc. recorded by others are the same as the amounts presented in the financial statements, physical evidence, and look at similar companies to see if my clients were similar so I had an idea of what to expect. I could also test samples, running through the client’s documented procedures to see if I came up with the same numbers and balances that my client

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