审计程序AUDIT PROCEDURES

　　In Example 1 above, we identified that fraud and the legal proceedings were adjusting events that gave rise to an adjustment within the financial statements as at 30 September 2010. We also identified that the loss of the customer was also an adjusting event, but as the value of the receivable was considered immaterial, no adjustment was made to the financial statements. Let us expand on the requirement in Example 1 as follows:

　　前述案例中定义出了“调整事项”，其中，顾客的损失也是调整事项，但是由于这笔金额太小因而没有调整财务报表。

　　以下是案例审计程序的详述：

　　Required:

　　(b) Describe the audit procedures that should be performed to obtain sufficient appropriate evidence that the subsequent events have been appropriately treated in the financial statements.

　　Answer:

　　Candidates who are faced with scenarios such as those in Example 1 should think about the information needed that would prompt an accountant or finance director to go back to the year-end and retrospectively amend the financial statements. You could interpret the question as asking ‘what information would I need in real-life to justify a provision or disclosure within the financial statements before making such provision or disclosure?’ Where candidates have studied Paper F3 and have knowledge of IAS 10, thinking about the provisions contained in this IAS 10 will often lead you into thinking about the audit evidence you would need to satisfy yourself that the requirements in IAS 10 have been met, as well as offering ideas as to how you would go about obtaining this evidence for the audit file.

　　Fraud

　　Fraud risk factors are covered in ISA 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements. The fact that fraud has occurred at Gabriella Enterprises Co will increase the risk of material misstatement due to fraud.

　　The audit procedures to be performed to ensure the fraud has been correctly accounted for in the financial statements may include:

　　• Recalculation of the amounts involved.

　　• Discussions with management as to how such a fraud occurred and why it took six months’ to discover the fraud (controls should prevent, detect and correct material misstatements on a timely basis).

　　• Establishing how the bookkeeper discovered the fraud and what controls (if any) contain weaknesses to allow the employee to commit the fraud. Note that employee fraud usually involves the manipulation of controls, whereas management fraud often involves the overriding of controls.

　　• Performing substantive procedures on journal entries (particularly those close to, or at, the year-end).

　　• Confirming directly with suppliers the account activity for the period under audit.

　　• Reviewing the purchase invoices and being on alert for any ‘doctored’ or ‘copy’ invoices and making enquiries as to their authenticity.

　　• A review of human resources files for evidence of disciplinary proceedings taken against the employee. This will also confirm compliance with laws and regulations, particularly in relation to employment legislation and the withholding of monies.

　　• Testing of other controls to identify other weaknesses that may indicate employee or management fraud.

　　• Obtaining written representations from management concerning the fraud.

　　• Test checking after-date cash for evidence of reimbursements by the employee, such as the withheld wages/salaries by the entity.

　　• Discussions with the entity’s legal advisers as to the possibility of reimbursement of the balance of the misappropriated funds.

　　Legal proceedings

　　• Obtaining a copy of the court order or other correspondence confirming the company has been found liable to pay compensation to its customer.

　　• Test checking after-date cash to confirm payment to the customer.

　　• Ensuring a provision has been recognised as opposed to disclosure as a contingent liability to meet the requirements in IAS 37, Provisions, Contingent Liabilities and Contingent Assets.