Literacture Review

An audit objective is to confirm that inventory exists. So, audit program is the set of natures, timing and audit procedures. Audit program consists of reference to accounting system, test of control, description of test to be performed, extent of testing, name of person conducting test and date and drawn the conclusion. There are three techniques of documentation which are narrative notes, flowcharts and questionnaires. Narrative notes is requiring little formal training and suited for simple system description. Flowcharts are a visual that highlights the controls in a firm. Questionnaires are designed to identify which parts of a system are strong or weak. The need of those documents are based on the factors which are size and complexity of entity, nature of accounting and internal control system, auditor’s intended reliance on internal control, ease of preparation. First of all, the audit firm will prepare a working paper that shows who will responsible in audit procedures, when and by whom they were review. The heading of the working paper should be the names of the audit firm and client, accounting year end and the title of the schedule. The schedule should be clearly set out, complete and legible. To fill the schedule they should use a logical sequence and serially referenced. All working papers should be referenced to financial statements or audit programs. A key must given to audit ticks and symbol used information on where the soft copy is stored and how it can be accessed also must be documented. Indexing is where they used for both permanent and current audit files. The alternative referencing systems might include separate section for interim audit working papers, system work and analytical procedures. Audit ticks are showing that the test has been performing, it’s consisting of symbols. The ticks usually made in the client’s book and documentation. Audit trail is a link between the information in documents and record and the recorded transaction can be...