Please explain in detail for me but as easy as possible. a) Describe 3 major typ

Question

Please explain in detail for me but as easy as possible.

a) Describe 3 major types of comparisons the auditor might make in performing analytical procedures

b) describe 3 major functions of the audit work papers

c) identify 4 items that are normally included in an engagement letter

d) identify 3 limitations that can exist with respect to an internal control system

e) identify 3 procedures used by auditors to detect loss contingencies

f) auditors perform various tasks in planning an audit engagement. provide an overall description of how each task is performed and its purpose.

g) audit programs are developed from audit objective that are derived from assertions made by management in the financial statements. Other than the auditors consideration of internal, list 4 general object for the audit of asset accounts.

Explanation / Answer

a. Comparisons made in performing analytical procedures include -

i. Comparisons with prior years' data

ii. Comparisons with budgets and forecasts

iii. Comparisons with industry statistics data available

b. Major functions of audit working papers include -

i. Provide a means of assigning and coordinating audit work

ii. Provide support for the auditors' report

iii. Guide in planning and conducting future audits

c. Items that are normally included in an engagement letter include -

i. Scope and Nature of audit work. Time Line to complete it.

ii. Name of the entity, statements to be examined and report to be given

iii. Audit Fee

iv. Management's obligation to conclude about the materiality of misstatements not recorded

d. limitations that can exist with respect to an internal control system include

i. Human Error

ii. Collusion

iii. Management Override or interferance

e. Procedures used by auditors to detect loss contingencies include-

i.Reviewing the minutes of board of directors' meetings

ii.Reviewing correspondence with banks and external parties

iii. Confirming account receivalbe

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