Poly Distributors Ltd. - Preliminary Audit Procedures Detailed instructions 1. BUY for get an empty) a 3 ring binder. Keep ONLY your Audit Simulation in this binder. BUY (or make) 6 tab markers/dividers. Look through the package - you will find the Sim has 6 sections. Divide up the sections and FILE them behind the dividers as follows: (THIS IS WORTH MARKSI) 1. Preliminary Audit Procedures Tests of Controls - Sales Receivables il. Substantive tests - Accounts Receivable iv. Audit of Cash v. Tests of Controls - Purchases Payables vi. Substantive tests - Accounts Payable 2. The following papers are in the Preliminary section. They should look familiar to you. (See step 3 below). Beside each paper is a brief description of what you should do 1. Engagement Letter read it note the bolded points 1. Client Description-read it, highlight the parts about RMC, City bank I. Org chart - audit team-read it, highlight your place on the team. Write in your instructor's name beside the Manager line iv. Client Financial Statements - Briefly review them v Planning Memo - ARP: fill in the blanks (use the WTS), choose the correct responses. Risk Assessment: Assess IR in the blank space, choose the correct response for the CR section. Ignore the DR section for now. Materiality: Calculate materiality on the WP worksheet attached, check with your manager on which guideline to use and which level to choose once you have done the calculations. Planning Factors: Calculate (from the WTB} last year's AFDA%. Time Budget: read vi. Internal Control Analyses - Descriptions and flowcharts. Pick the correct level of CR for each of the systems based on your study of the flowcharts for Sales and Purchases. Use the control responses in the cash section. vil. Audit Programs-Examine them. Note that they are indexed as "Ad" items which means they are part of the administrative papers of the audit even though they will be used to do the current year number crunch" audit later. vit. WTB and Adjusting Entries - Examine them. Use the WTB to do your ARP and AFDA calculation above. Note these are indexed as A & B even though they are part of the Admin Papers. They are the bridge from the financial statements and GL to the audit working papers. Examine the indexing on the WTB. 3. Review your text/content in the following areas Planning, Materiality. Risk Plansprograms, WP il. Control Evaluation, Flowcharts Poly Distributors Ltd. - Preliminary Audit Procedures Detailed instructions 1. BUY for get an empty) a 3 ring binder. Keep ONLY your Audit Simulation in this binder. BUY (or make) 6 tab markers/dividers. Look through the package - you will find the Sim has 6 sections. Divide up the sections and FILE them behind the dividers as follows: (THIS IS WORTH MARKSI) 1. Preliminary Audit Procedures Tests of Controls - Sales Receivables il. Substantive tests - Accounts Receivable iv. Audit of Cash v. Tests of Controls - Purchases Payables vi. Substantive tests - Accounts Payable 2. The following papers are in the Preliminary section. They should look familiar to you. (See step 3 below). Beside each paper is a brief description of what you should do 1. Engagement Letter read it note the bolded points 1. Client Description-read it, highlight the parts about RMC, City bank I. Org chart - audit team-read it, highlight your place on the team. Write in your instructor's name beside the Manager line iv. Client Financial Statements - Briefly review them v Planning Memo - ARP: fill in the blanks (use the WTS), choose the correct responses. Risk Assessment: Assess IR in the blank space, choose the correct response for the CR section. Ignore the DR section for now. Materiality: Calculate materiality on the WP worksheet attached, check with your manager on which guideline to use and which level to choose once you have done the calculations. Planning Factors: Calculate (from the WTB} last year's AFDA%. Time Budget: read vi. Internal Control Analyses - Descriptions and flowcharts. Pick the correct level of CR for each of the systems based on your study of the flowcharts for Sales and Purchases. Use the control responses in the cash section. vil. Audit Programs-Examine them. Note that they are indexed as "Ad" items which means they are part of the administrative papers of the audit even though they will be used to do the current year number crunch" audit later. vit. WTB and Adjusting Entries - Examine them. Use the WTB to do your ARP and AFDA calculation above. Note these are indexed as A & B even though they are part of the Admin Papers. They are the bridge from the financial statements and GL to the audit working papers. Examine the indexing on the WTB. 3. Review your text/content in the following areas Planning, Materiality. Risk Plansprograms, WP il. Control Evaluation, Flowcharts
