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Auditing Work Essay

826 words - 4 pages

Cut Off:
Cutoff relates to whether transactions and events have been recorded in the correct accounting period. Audit procedures must ensure that transactions occurring near year-end are recorded in the financial statements in the proper period.

For example, the auditor may want to test proper cutoff of revenue transactions at December 31. This can be done by examining a sample of shipping documents and sales invoices for a few days before and after year-end.
Audit evidence:
Audit Evidence is evidence obtained during a financial audit and recorded in the audit working papers.
In the audit engagement acceptance or reappointment stage, audit evidence is the information that the auditor ...view middle of the document...

Also called post balance sheet events
Events that occur between a balance-sheet date and the date on which financial statements are approved, providing additional evidence of conditions existing at the balance-sheet date. For example, a valuation of a property held at the balance-sheet date that provides evidence of a permanent diminution in value would need to be adjusted in the financial statements. Such events include those that, because of statutory or conventional requirements, are reflected in financial statements. Statement of Standard Accounting Practice 17, ‘Accounting for Post Balance Sheet Events’, requires that such material events should be reflected in the actual account balances in the financial accounts, where they purport to give a true and fair view.
A non-adjusting event concerns conditions that did not exist at the balance-sheet date; such events may need to be disclosed in the notes to the accounts. An issue of shares after the post-balance-sheet period would be an example of a non-adjusting event. If an event would be classed as non-adjusting, but the application of the going-concern concept to the whole, or a material part, of the company is not appropriate, it should be treated as an adjusting event. For example, if serious industrial action has occurred, which if it continues could threaten the continued existence of the business, an appropriate provision should be made in the accounts.
Due Care:
Degree of care that an ordinary and reasonable person would normally exercise, over his or her own property or under circumstances like those at issue. The concept of due care is used as a test of liability for...

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