live soft skills

Analytical Procedures as substantive evidence ISA 520 states that analytical procedures must be used at the planning stage to identify risks, and at the completion stage of the audit as a final review of the FS. They may also be used at the substantive stage when the auditor is auditing the draft financial statements. Analytical procedures are not just the comparison of one year with another. AP’s can be used in the following ways: • Ratio analysis • Trend analysis • In order to use analytical procedures the following process should be followed: • Create your own expectation of what you think the figure should be • Compare your expectation to the actual figure • – Example 1 create an expectation of payroll costs for the year by taking last year’s cost and inflating for payrise and change in staff numbers – proof in total. – Example 2 – calculate the receivables day ratio and compare it with prior year and credit terms given to customers. If the figure is higher than expected it may i...

‘Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements’ ISA 320 para 3 So what really is materiality? (material by nature). • A big amount of money (material by size). • – triggers a threshold – indicates future developments or other significant events – whose disclosure is compulsory Why is materiality important? • show a true and fair view. If financial statements contain a material misstatement they cannot • of material misstatement to an acceptable level. Auditors therefore must design their audit procedures to reduce the risk • before they design their procedures – hence its place in this chapter. This means that auditors must decide on what they mean by ‘material’ What are the implications for the work the auditors do? Auditors will: BUT • Need to examine all items in the financial statements which are material • amounts have not been they will also need to design tests to give assu...

Bank and cash controls Control objectives ● That money is not stolen ● That money received is paid into company bank accounts quickly ● That payments are for genuine business purposes. Control procedures ● Money on company premises kept in a safe ● Where there are tills, these are: o Kept locked when no staff are present o Have prices of products pre-programmed o Only accessible to someone with a key, or a personalised swipe card o ● Money taken to bank using security vans, which do not always take the same route on the same day of the week ● List of approved signatures for each bank account ● Regular bank reconciliations ● Cash receipts recorded immediately, and compared with date cash arrives in bank account ● Payments above a minimum figure require 2 signatures. Reconciled daily (till record v actual cash in till)

Audit procedures Observation Observation consists of looking at a process or procedure being performed by others. It could be used here to observe employees scanning their cards when they start and finish a particular shift. However, its use is limited because it only provides evidence that the process happened at the time of observation. It should be used in conjunction with other audit procedures. Inquiry Inquiry consists of seeking information of knowledgeable individuals, both financial and non-financial, throughout the entity or outside the entity. This can be used to find out how the time recording system works by interviewing relevant staff so would be a good procedure to use. Recalculation Recalculation consists of checking the mathematical accuracy of documents or records. It could be used to calculate the hours worked according to the information on the time recording system. Reperformance Reperformance is the auditor's independent execution of procedures or controls tha...

The Oxford Brookes University Research and Analysis Project (RAP) is the final component of the Oxford Brookes University BSc (Hons) in Applied Accounting degree. To reach this stage of the BSc degree you have already successfully completed at least nine demanding ACCA professional exams. You have already demonstrated your undergraduate level abilities by passing the ACCA exams; the RAP provides you with the opportunity to demonstrate the remaining graduate level attributes necessary for the award of the BSc degree. Please read the RAP learning outcomes and assessment criteria carefully before you start your RAP work. This will help you understand what is expected of an ACCA student who wishes to submit a RAP to Oxford Brookes University. You should understand that your research work and preparation of the RAP is covered by the Oxford Brookes University academic regulations. This includes the University’s regulations on cheating which can be found on this website. If an ACCA student o...

In countries where there is greater inclusivity in decision-making, or where there is a strong family dominance, it is possible that a A The 2-tier system may also operate with family dominated companies, with family members having their own top-level private Board which has controlling voting rights (and therefore where the true decision-making power rests). To an extent, schools in the UK may be seen to have a 2-tier system, with the Head / Principal and a small number of senior teachers on a management board, with the School Governors in a more supervisory role. Of course, schools naturally have a lot of stakeholders (parents, teachers etc.) so would seem well-suited to this structure. 2-tier board will exist. Management Board will run the day to day operations of the company, but will be monitored by a higher level Supervisory Board . In UK terms, this is similar to having the NEDs on a top board, with the Executive Directors on a separate lower Board. Advantages of 2-tier boa...

Corporate Governance varies around the World, largely due to different history and cultures. In the UK and US, the model is aimed primarily at the rights of shareholders. In Germany and much of continental Europe, and also in Japan, In Japan, many major company structures were traditionally based around banks. Large groups of companies from many industries would all be financed, and part-owned by a major bank, which would create a strong financial alliance. Cross-shareholdings between companies were common, and in many cases the companies in the "group" would all supply each other. In South America, Italy, Spain, and large parts of East Asia (e.g. Indonesia) the focus is more on banks play a more prominent role, often holding shares and having Board members. Such governance models tend to be more inclusive, ensuring that the rights of workers, customers and suppliers (and maybe the community) are represented at Board level. family ownership , with a large % of the bigges...