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Auditing and Assurance Services: An Integrated Approach In this chapter, focus on processes and procedures for...

Auditing and Assurance Services: An Integrated Approach

In this chapter, focus on processes and procedures for performing audit tests of the following:

cash

financial instruments

Business   Accounting   
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Answer #1

Procesures for audits of the items mentioned :

Cash-

  • ?The confirmation has to be received from banker's regarding the entity's bank balances.
  • If the company's cash reserves includes foreign currency, the auditor can perform an independent translation procedure using the relevant exchange rate.
  • The reconciliation process of the company has to be checked.
  • The auditor also needs to check the classifiaction of free cash flows and restricted cash flows.

Financial instruments:

  • ?Financial instruments are used to hedge the entity against risk. Test how management calculated the estimate of the risk.
  • Use information from third party sources.
  • Engage an expert to make his independent estimate.
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