TRAINING AUDIT I

Audit Competence Awakening

AUDIT PHASES

PHASE I PRE ENGGAGEMENT,

GATHERING AUDIT PLANNING
INFORMATION AND RISK ASSESSMENT

INHERENT RISK,
PHASE II
CONTROL RISK, FRAUD RISK AND
RISK ASSESSMENT
RISK ASSESSMENT

TEST OF CONTROL,
PHASE III
ANALYTICAL PROCEDURES,
RISK RESPONSES
SUBSTANTIVE TEST OF DETAILS

PHASE IV AUDIT COMPLETION

REPORTING AND AND
COOMUNICATION ISSUE AUDIT REPORT
DESIGN OF TESTS
 DESIGN OF TESTS OF CONTROLS
Nature of Tests:
- Inquiring
- Observing
- Inspecting
- Re-performance
 DESIGN OF SUBSTANTIVE TESTS
Nature of Tests:
- Analytical Procedures
- Tests of Details of Transactions
Primary Tracing and Vouching
- Tests of Details of Balances
Focus on evidence directly about
account balance, such as
confirmation, Inventory taking,
DESIGN OF AUDIT PROGRAM
 COMPLIANCE TEST (TEST OF CONTROL)
AND SUBSTANTIVE TEST
 COMPLIANCE TEST (TOC)ADALAH PROSEDUR AUDIT YANG
DILAKUKAN UNTUK MENGUJI EFEKTIVITAS STRUKTUR
PENGENDALIAN INTERN. JADI PENEKANANNYA ADALAH
PADA PENGUJIAN KETAATAN TERHADAP KEBIJAKAN DAN
PROSEDUR YANG DITETAPKAN.

 SUBSTANTIVE TEST ADALAH PROSEDUR AUDIT YANG

DILAKUKAN UNTUK MENGUJI ATAU MELAKUKAN VERIFIKASI
UNTUK MENDETEKSI KESALAHAN YANG BERSIFAT
MONETARY (ANGKA-ANGKA).

 DUAL PURPOSE TEST ADALAH PENGUJIAN SUBSTANTIVE

TEST BERSAMAAN DENGAN COMPLIANCE TEST SECARA
BERSAMAAN WAKTU.
TESTS OF CONTROLS

 EXECUTING TESTS OF CONTROLS

- Additional/Planned of Tests of Controls
- Extent of Tests

 EXECUTING SUBSTANTIVE TESTS

Dual Purpose Tests

TESTS OF CONTROLS AND SUBSTANTIVE

TESTS
PERFORM SUBSTANTIVE
TESTS
 SUBSTANTIVE TESTS
- Analytical Procedures
- Tests of Details of Transactions
- Tests of Details of Balance

PERFORM ANALYTICAL PROCEDURE AND

SUBSTANTIVE TESTS
ANALYTICAL PROCEDURES

 ANALYTICAL PROCEDURES IS TO OBTAIN

PLAUSIBLE RELATIONSHIP AMONG THE
ACCOUNTS IN THE FINANCIAL
STATEMENTS.

 ANALYTICAL PROCEDURES IS TO GET

OVERALL ASSESSMENT OF FINANCIAL
STATEMENTS.

 THE OBJECTIVE IS TO GET THE SUFFICIENT

EXPECTED EVIDENCE.
TEST OF DETAIL OF TRANSACTION

 INCLUDES:

 VOUCHING TO VERIFY THE ASSETIONS OF

THE EXISTENCE AND VALIDITY OF
TRANSACTIONS.

 TRACING TO VERIFY THE ASSERTION OF

THE COMPLETENESS OF TRANSACTIONS.
TEST OF DETAIL OF BALANCE

 INCLUDES:

 PHYSICAL EXAMINATION TO VERIFY THE

EXISTENCE OF ASSETS IN PHYISIC.

 CONFIRMATION TO THIRD PARTY TO

VERIFY THE ASSERTION OF EXISTENCE
AND ACCURACY OF THE BALANCE.

 MATHEMATICAL ACCURACY TO VERIFY THE

ASSERTION OF ACCURACY.
 AUDIT EVIDENCE
 AUDIT EVIDENCE – INFORMATION USED BY THE AUDITOR IN
ARRIVING AT THE CONCLUSIONS ON WHICH THE
AUDITOR’S OPINION IS BASED. AUDIT EVIDENCE INCLUDES
BOTH INFORMATION CONTAINED IN THE ACCOUNTING
RECORDS UNDERLYING THE FINANCIAL STATEMENTS AND
OTHER INFORMATION.

 THE AUDITOR SHALL DESIGN AND PERFORM AUDIT

PROCEDURES THAT ARE APPROPRIATE IN THE
CIRCUMSTANCES FOR THE PURPOSE OF OBTAINING
SUFFICIENT APPROPRIATE AUDIT EVIDENCE.

 ACCUMULATED AUDIT EVIDENCE CAN BE AFFECTED BY:

1. NATURE.
2. EXTENT.
3. TIMING.

REFER TO SA 500: AUDIT EVIDENCE.

AUDIT EVIDENCE
COMBINED ASSESSED LEVEL OF INHERENT AND CONTROL RISK
(RMM)

MAXIMUM HIGH MODERATE LOW

ACCEPTABLE LEVEL OF DETECTION RISK

VERY LOW LOW MODERATE HIGH

SUBSTANTITVE TESTS
MORE EFFECTIVE NATURE LESS EFFECTIVE

YEAR END TIMING INTERIM

LARGER SAMPLE EXTENT SMALLER SAMPLE

 PERSUASIVENESS EVIDENCE

 APPROPRIATENESS IS THE MEASURE OF THE QUALITY

OF AUDIT EVIDENCE; THAT IS, ITS RELEVANCE AND ITS
RELIABILITY IN PROVIDING SUPPORT FOR THE
CONCLUSIONS ON WHICH THE AUDITOR’S OPINION IS
BASED. THE RELIABILITY OF EVIDENCE IS INFLUENCED
BY ITS SOURCE AND BY ITS NATURE, AND IS
DEPENDENT ON THE INDIVIDUAL CIRCUMSTANCES
UNDER WHICH IT IS OBTAINED.

 PERSUASIVENESS EVIDENCE IS DETERMINED BY 4

FACTORS:
1. COMPETENT;
2. SUFFICIENT;
3. TIMELY;.
4. OBJECTIVE.
COMPETENT EVIDENCE

 EVIDENCE IS COMPETENT IF THE SUCH

EVIDENCE IS VALID AND RELEVANT TO AUDIT
OBJECTIVES.

 COMPETENT EVIDENCE CAN NOT BE

MEASURED BY ADDING SAMPLE OR TAKE
OTHER POPULATION.

 COMPETENCY HAS FIVE CHARACTERS:

1. INDEPENDENCE OF INFORMATION POVIDER;
2. EFFECTIVENESS OF INTERNAL CONTROL
STRUCTURE;
3. AUDITOR DIRECT KNOWLEDGE;
4. INDIVIDUAL QUALIFICATION OF
INFORMATION PROVIDER;
5. OBJECTIVITY DEGREE.
SUFFICIENT EVIDENCE
 THE QUANTITY OF EVIDENCE WILL DETERMINE
THE SUFFICIENCY.

 FACTORS DETERMINING THE AMOUNT OF

EVIDENCE OR SAMPLES TAKEN:
1. THE AUDITOR’S EXPECTATION ON
MISSTATEMENT.
2. EFFECTIVENESS OF CLIENT’S INTERNAL
CONTROL STRUCTURE
TIMELY EVIDENCE

 TIMELY CAN REFER TO:

1. WHEN THE EVIDENCE OBTAINED.

2. AUDIT PERIOD COVERAGE.

 FOR EXAMPLE:
COUNTING MARKETABLE SECURITIES ON BALANCE SHEET
DATE WILL BE MORE PERSUASIVE THAN COUNTING 2
MONTHS BEFORE.

 FOR INCOME STATEMENT, SAMPLE EVIDENCES ARE MORE

PERSUASIVE TAKEN FROM THE WHOLE POPULATION OF
THE AUDIT PERIOD THAN TAKEN FROM A PART OF THE
AUDIT PERIOD.
 OBJECTIVE EVIDENCE

 OBJECTIVITY CAN BE SEEN FROM:

1. QUALIFICATION CONSIDERATION AND
INDIVIDUAL INTEGRITY.
2. ASSESSING APPROPRIATENESS
DECISION PROCESS MAKING.
TYPE OF AUDIT EVIDENCE

 AUDIT EVIDENCE INCLUDES:

1. INQUIRIES.
2. OBSERVATION AND INSPECTION.
3. REPERFORMANCE.
4. ANALYTICAL PROCEDURES.
5. DOCUMENTATION (VOUCHING &
TRACING).
6. PHYSICAL EXAMINATION.
7. CONFIRMATION.
8. RECALCULATION
(MATHEMATICAL ACCURACY).
TRANSACTION CYCLE

 BASED ON THE NATURE OF TRANSACTIONS, THE

TRANSACTIONS CAN BE GROUPS IN THE CYCLE AS
FOLLOWS:
1. REVENUE CYCLE.
2. EXPENDITURE CYCLE.
3. PRODUCTION AND PERSONNEL CYCLE.
4. INVESTING CYCLE.
5. FINANCING CYCLE.
 TRANSACTION CYCLES ILLUSTRATION
GENERAL LEDGER GENERAL LEDGER
JOURNAL
CYCLE IN CYCLE
IN CYCLE IN CYCLE
(PROFIT OR LOSS)
(BALANCE SHEET)
-- CASH AND BANK
- SALES JOURNAL - ACCOUNT RECEIVABLE - REVENUE FROM SALES
- NOTES RECEIVABLE - SALES RETURN
- CASH/BANK RECEIPT
REVENUE JOURNAL
- OTHER RECEIVABLE - SALES DISCOUNT
-- ALLOWANCE FOR - BAD DEBT EXPENSE
- GENERAL JOURNAL -DOUBTFUL ACCOUNT

-ADVERTESING
- CASH AND BANK
- TRAVELLING AND
- INVENTORY
-REPRESENTATION
- PREPAID ITEMS
- PURCHASES JOURNAL - TRAINING
- FIXED ASSETS
- CASH/BANK - OTHER SALES EXPENSE.
- ACC. DEPR. FIXED ASSETS
- STATIONERY
EXPENDITURES DISBURSEMENT - ACCOUNT PAYABLE
- POSTAGE
JOURNAL - NOTES PAYABLE
- TELEPHONE
- OTHER PAYABLE
-GENERAL JOURNAL - MAGAZINE AND PAPER
- ACCRUAL
- TAX
- ESTIMATED TAX PAYABLE
- DEPERECIATION
- RENT ETC.

- PAYROLL JOURNAL - CASH AND BANK

- SLARY AND COMISION
- PURCHASES JOURNAL - ACCRUED SALARY
-PPh 21 SALARY
PRODUCTION AND - SALES JOURNAL - ACCOUNT PAYABLE
- COST OF SALES
PERSONNEL - CASH/ BANK - TAX PAYABLE(PPh 21)
ETC.
DISBUREMENT JOURNAL - INVENTORY
-GENERAL JOURNAL
- PURCHASES JOURNAL - CASH AND BANK
- CASH/BANK -INVESTMENT - INTEREST INCOME
INVESTING DISBURSEMENT JOURNAL - UNEARNED REVENUE - DIVIDEND INCOME
- GENERAL JOURNAL
- CASH AND BANK
- NOTES PAYABLE
- CASH/BANK RECEIOT - BOND PAYABLE
- BANK LOAN - INTEREST EXPENSE
FINANCING JOURNAL - ACCRUED INTEREST - DIVIDEND
- GENERAL JOURNAL - DIVIDEND PAYABLE
- PAID IN CAPITAL
- APIC
 RELATIONSHIP TRANSACTION CYCLES WITH
CASH/BANK
EXPENDITURE CYCLE
REVENUE CYCLE
PURCHASES
SALES
CASH
CASH SALES PURCHASES
2
ACCOUNT PAYABLE
1
ACCOUNT RECEIVABLE
PAYMENT
COLLECTION

CASH / BANK
REVENUE CYCLE (1) (2) EXPENDDITURE CYCLE
FINANCING CYCLE (4) (3) FINANCING CYCLE
INVESTMENT CYCLE (6) (5) INVESTMENT CYCLE
(7) PRODUCTION & PERSONNEL
CYCLE

FINANCING CYCLE
INVESTMENT CYCLE
BOND PAYABLE
INVESTMENTI
SETTLEMENT ISSUANCE
5 PURCHASE OF SALES OF
6
SECURITIES SECURITIES
PAID IN CAPITAL 4
6
TREASURY ISSUANCE INTEREST & DIVIDEN INCOME
STOCK
3 PRODUCTIOIN & PERSONNEL CYCLE INT &
DIVIDEND
INTEREST & DIVIDEND PAYABLE FOH PAYABLE
RECEIPT
PAYMENT
INTEREST
& DIVIDEND
7
PAYMENT EMPLOYEE TAX PAYABLE
TAX PAYMENT
MANAGEMENT ASSERTIONS

 MANAGEMENT’S FINANCIAL STATEMENTS

INCLUDING EXPLICITLY AND IMPLICITLY
ASSERTIONS.

 MANAGEMENT ASSERTIONS ON FINANCIAL

STATEMENTS CAN BE GROUPED AS FOLLOWS:
1. EXISTENCE OR OCCURRENCE.
2. COMPLETENESS.
3. RIGHTS AND OBLIGATION.
4. VALUATION OR ALLOCATION.
5. PRESENTATION AND DISCLOSURE.
 EXISTENCE OR OCCURENCE

 THIS ASSERTION IS A MANAGEMENT’S

STATEMENT THAT THE ASSETS OR THE
LIABILITY OF THE COMPANY ON THE
DATE OF BALANCE SHEET REALLY
EXISTS AND THE TRANSACTION IS
REALLY VALID AND INCURRED.
COMPLETENESS

 THIS ASSERTION IS MANAGEMENT’S

STATEMENT THAT ALL TRANSACTIONS
AND ACCOUNTS HAVE BEEN REPORTED
IN FINANCIAL REPORT COMPLETELY.
RIGHTS AND OBLIGATION
 THIS ASSERTION IS MANAGEMENT’S
STATEMENT THAT THE ASSETS ON
THE DATE OF BALANCE SHEET IS
REALLY OWNED OR THE RIGHTS OF
THE COMPANY AND LIABILITY ON THE
DATE OF BALANCE SHEET IS REALLY
THE LIABILITY (PAYABLE) OF THE
COMPANY.
 VALUATION OR ALLOCATION

 THIS ASERTION IS MANAGAMENT’S STATEMENT

THAT THE ASSETS , LIABILITY, REVENUE AND
EXPENSES IN THE FINANCIAL STATEMENTS ARE
PRESENTED CORRECTLY AND APPROPRIATELY
IN ACCORDANCE WITH FINANCIAL STATEMENT
FRAMEWORK.
PRESENTATION AND DISCLOSURE

 THIS ASSERTION IS MANAGEMENT’S

STATEMENT THAT THE CERTAIN
COMPONENTS IN THE FINANCIAL
STATEMENT HAVE BEEN CLASSIFIED,
EXPLAINED AND DISCLOSED
ADEQUATELY.