Question

For each of the general audit procedures of (1) recalculation, (2) inspection of internal documents, (3) reperformance, and (4) analytical procedures, discuss one way the procedure could be misapplied or the auditors could be misled in such a way as to render the work (audit evidence) misleading or irrelevant.

Answer 1

Importance of aduit procedures : Audit procedures are desgin by the auditor, audit is an examination of the financial books and records of the company . auditor follow the procedures to minimize the chance of error or misapplied or misleading in the audit process.

1. Recalculation: Recalculation is the type of audit procedure is that already done by the client but Auditor re-perorm that work in audit process to verify the accuracy of work that performed by the client. Purpose of recalculation is checking the mathematical accuracy of the document or records. Auditors Are checking client created schedules and ledgers to ensure that the calculation are perfomed Accurately by the recalculating the document. Example of recalculation : Auditor are recalculate the Calculation of capital gain tax or monthly salaries expenses report prepare by payroll department.

2. Inspection of internal documents : Inspection is very important process by verification of voucher or Documents are provided by the client in financial reports, Example of inspection: Auditor might verify The slaes invoice issued by the client is really based on the goods are sale by the client . however Auditor are also check supporting documents as sales and purchase invoice and recording data of Investories movement of the year .

3. Reperformance : The reperformance process involves the auditor are independent execution of the Audit procedures or controls that were originally performed by the company executive . Example of Reperformance : Auditor might verify the valuation of the assets of the company or verify the Calculation of the depreciation done by the comapny executive. check the accuracy of the data in Balnce sheet and relative schedules .

4 Analytical procedures: Analytical procedures involves the evaluations of the financial data clloected By the among the audit process, analytical procedures also encompass the investigation of date Collected in the process, verify the data and check any variances in the data gather in the process of Audit . Example analytical procedures : Auditor are check bad debt expenses . this amount should Changes in relation to slaes if not company management may not be correctly identify bad debts in a Tmely manner this is a trend analysis.