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Concept Map - Cooperatives & Construction Companies

This document provides a concept map comparing the audit of cooperatives and construction companies. Some key accounts differ between the industries, such as loans/receivables and interest income for cooperatives, and bank loans, property/equipment, and inventories for construction companies. The assertion risks also differ, affecting completeness, valuation, and rights/obligations. Audit risks include lack of segregation of duties and intentional misstatement of debts for cooperatives. Substantive audit procedures are then outlined to address the relevant assertions for each industry.

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Sherilyn Bunag
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114 views2 pages

Concept Map - Cooperatives & Construction Companies

This document provides a concept map comparing the audit of cooperatives and construction companies. Some key accounts differ between the industries, such as loans/receivables and interest income for cooperatives, and bank loans, property/equipment, and inventories for construction companies. The assertion risks also differ, affecting completeness, valuation, and rights/obligations. Audit risks include lack of segregation of duties and intentional misstatement of debts for cooperatives. Substantive audit procedures are then outlined to address the relevant assertions for each industry.

Uploaded by

Sherilyn Bunag
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Bunag, Sherilyn C.

BSA – A3A
Concept Map – Audit of Cooperatives and Construction Companies

Audit of Cooperatives Audit of Construction


Companies
Pre-Planning
What are the prominent Loans and Receivables (1), Bank Loans (1), Property,
accounts used in this Interest Income from Credit Plant, and Equipment (2),
particular industry? Operations (2), Long-term Inventories (3)
Debt (3)

What financial statement Completeness and Valuation Accuracy and Valuation (1)
assertions are affected by (1) Rights and Obligations,
these accounts? Valuation and Existence (2) Valuation, Completeness (2)
Rights and Obligations, Completeness and Valuation
Completeness, Presentation (3)
and disclosure (3)

Planning
What are the audit risk No segregation of duties No segregation of duties
factors/threats that are Material misstatements Material misstatements
mainly expected to arise in Intentional understatement
this particular industry? of debts

Internal Control Considerations


What are the transaction Cash receipts cycle PPE Controls
cycles that are greatly Receivables cycle Cash receipts cycle
affected by the nature of Payables cycle Receivables cycle
their business? Payables cycle

Substantive Audit Procedures


Based on the above (1) (1)
assertions, what audit Assess the adequacy of Send request of confirmation to
procedures should be related systems of internal the banks and compare it with
applied? control and perform the amounts reported
confirmation Select a sample of transactions
Review allowance and re-perform calculation of
computations to see whether interest and check the number
it is consistent with the prior of days for which the interest
years. Calculate receivable income is charged
turnover and compare with
the previous year. (2)
Reconcile PPE register with the
(2) general ledger
Confirm account balances Check PPE depreciation
from the general ledger to Perform physical inspection on
the subsidiary ledger selected PPEs
Recalculate and reconcile
interest received with the (3)
credit balances and test for Select a sample of inventory
proper accruals received documents the trace it
back to detail inventory listing
(3) Check for obsolete raw
Review the debt schedule materials and confirm if these
Summarize and review loan are separated from other
agreements inventories with enough report
Perform positive and documentation as to its
confirmation market value

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