Question

Looking at recent Facebook's Cambridge analytica data breach case study.

prepare

Audit Plan, Objectives and Procedures

Prepare an audit plan outlining the areas that you propose to audit. In addition, you will need to include audit objectives and audit procedures for each of the area(s) that you plan to audit.

Audit Questions and Documents

For each of the audit objectives, provide at least three examples of interview questions that you will use to gather evidence from clients, including naming relevant documents that you may want to obtain for the audit.

Control Recommendations

Provide a set of recommendations of control mechanism(s) to mitigate for each of the IS risks. Identify the benefits of your recommendations to your client. I will five 10 likes to the answer and please answer in detail. will be a big help

Answer 1

Auditing is said to be an examination conducted inorder to determine accuracy of financial statements and to certify if financial statements are prepared and maintained as per applicable accounting standards.

An audit hasto be conducted as per applicable auditing standards.

* public company accounting oversight board maintains external auditing standards for public companies registered with securities and exchange commission.

* other standards are described by Auditing Standard Board which is part of American institute of CPA.

Audit planning :

Audit planning includes decisions regarding what strategy hasto be followed and what kind of plan to be implemented in the process of conducting audit.

Audit standard ISA 300 from PCAOB describes

* external auditor responsibilities

* nature extent and timing of audit procedures to be implemented.

* procedures for risk assessments of controls and substantive procedures.

But for internal Auditing , institute of internal auditors provides audit planning guidance.

eg : Audit plan outline of A Ltd

steps

1. Understanding of client

* find out details relating to existence of A Ltd viz : public limited company rules if satisfied while it's formation. MOA and AOA details in order to find out existence details of co

2. identify significant accounting transactions :

* sales transaction / purchases transactions shall be verified by checking relative pay cheques / invoices / bank account statements.

* understand if any bogus transactions exist and is the mechanism followed by company on recording transactions is adequate / any other method suits better ??

* if any loops of internal administration faults exists in accounting department , have a look.

3. Set audit materiality :

* set a mark / range viz transactions / specific clients accounts ranging between

100 $ to 1000$ - check if its valid transaction

Ask client the counter invoice and verify if both match

If variation exist find out why such variation persist

Pass book entries / mini statements in this rgd csn be collected to counter verify

4. Execution of formulated audit strategy

* first observe

second document

third counter check

fourth physical inspection

Fifth additional verification of respective papers

sixth document modifications to be noted down

seventh reasons for changes assesed

Eigth obtain written representations

Eg : value of credit sales for the year exist ??

Bifurcation details of cash and credit sales

Any discount obtained ?? Whether trade discount / cash discount ??

Tenth final documentation of conclusions.

This kind of specific set strategy is too be implemented in every felt important transaction.

5. Control strategies if company uses information technology food its administration.

Eg : ERP / any other software used for maintaining books of accounts ?? If exist certify the system with mock transaction.

Observe how does its effect reflect in statements.

Verify if that is sifficient as per applicable accounting policies

If any loops found in the software , assess Control risk.

And if necessary , state recommendations like

? points to be implemented in software

? additional details that ate to be reflected in order to meet accounting policies

? any other renouned software that matches clients activities needs.

6. Substantive procedures

Eg : debtors

* inspection of debtors if really existed and are connected to co transactions

* observe credit notes / bills raised / credit purchase invoices and if any turned to bad debts

* call any other third party who is connected to our debtor inorder to find out if they are reliable in transactions.

* recalculate the values and reconfirm figures reflecting in accounting statements.

* now finally obtained audit evidence is to be documented.

7. Audit sampling

Take a sample bunch of trabsactions per client basis / per month basis / per invoics basis / any other sampling strategy

Now conduct substantive procedures for these samples.

8. Concluding and reporting

Finally from all obtained understandings / audit evidence and audit documentations conclude audit report.

9. Subsequent events if any existed

Eg : fire accidents / over draft / any other significant event arises during the period between reporting and adopting financial statements then the numerical effect of such event hasto be quantified and reflected in financial statements