The auditing environment continues to change in dramatic ways, and professionals must be prepared for a high standard of responsibility, strategies, and policies. Changes in Accounting Policies must be applied properly. Here I have gathered some information regarding accounting policies to be known by an auditor.
Prepared By : Date:
Reviewed By : Date:
- The audit of a very small business is based on a substantive approach with no reliance on internal control. Consequently, it is not necessary to identify or test key controls and this section should consist only of a concise summary of the areas outlined below in order to assist in performing substantive tests.
- Other useful information related to accounting policies:
Document below any additional information related to the accounting process that may be useful when performing substantive procedures, such as:
- Location of the primary accounting records (e.g. bank statements, minutes, agreements, etc.)
- Names of individuals responsible for the key accounting functions (e.g., authorization of expenses, follow up of overdue amounts, recording of transactions, reconciling bank accounts, preparation of summary reports, etc.)
- Description of any commercial accounting software packages used (e.g., the accounting functions performed, who is responsible for program data, reports produced, data stored, how problems are resolved.)
- Accounting Policies
- Consider whether the accounting policies used are appropriate and consistent with that of the prior year.
- Consider the risk of going concern assumption and its impact on the financial statements.