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Financial Auditing

Fee:

$2,050

· QuickCode:

QQAGWN

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Provider:
MIS Training Institute

Topic(s):
Finance & Accounting > Fundamentals

Who Should Attend?
Internal and IT auditors with less than two years of financial audit experience

Full Seminar Description

Fundamentals of Auditing Financial Statements and Processes

Focus and Features

Today's new auditors frequently lack the core accounting and financial skills once expected in professionals entering the field. In addition, recent events require auditors to have a better understanding of GAAP and the financial statement process. This foundation-level, three-day seminar is intended to round out your knowledge of operational and IT auditing with financial auditing skills. You will learn general concepts and techniques for planning and conducting financial audits and how to apply these basic skills to audits of specific business cycles and functions. You will come away from this session with a basic understanding of financial statements, GAAP and GAAS, the accounting cycle, internal control basics, analytical procedures, and risk assessment strategies that affect financial audits. In addition, you will cover fraud risk, SOX requirements and PCAOB standards, and how to work effectively and efficiently with external auditors.

Prerequisite: None

Advance Preparation: None

Learning Level: Basic

Delivery Method: Group-Live

Field: Auditing

Who Should Attend

Internal and Information Technology Auditors with less than a year of financial audit experience; experienced Auditors who need to know more about basic financial accounting and related auditing skills

Agenda

1. Introduction to Financial Accounting and Reporting

• definitions and objectives of financial accounting and reporting
• Generally Accepted Accounting Principles (GAAP)
• financial statement elements
• principles of accounting and basic accounting rules
• sample financial statements

2. Financial Auditing and the Attestation Process

• definition of financial auditing
• auditing, attestation, and assurance
• Generally Accepted Auditing Standards (GAAS)
• the financial auditing process
• management’s representation letter
• types of external audit financial statement audit opinions
• the SEC 10-K Report

3. Risk Assessment and Materiality

• risk assessment and the business risk environment
• risk factors
• internal control risk
• the risk of fraud
• audit risk and the financial audit risk model
• materiality and materiality concepts
• SEC Staff Accounting Bulletin (SAB) No. 99: Materiality

4. The Financial Auditing Approach

• the financial auditing approach
• relationship between the financial statements, management assertions, audit objectives, audit procedures, and audit programs
• the audit planning process
• financial statement assertions
• audit evidence
• compliance and substantive audit tests
• financial skills for auditors
• audit programs
• audit fieldwork
• audit workpapers

5. External Audit Support

• SAS No. 65: The Auditor’s Consideration of the Internal Audit Function in an Audit of Financial Statements (AU322)
• audit assistance and coordination with the external auditors
• steps for effective coordination of audit effort
• working paper requirements and guidelines

6. Audit Sampling

• audit sampling and sampling concepts
• statistical sampling
• important audit sampling terminology and techniques
• audit sampling for tests of controls (attribute sampling)
• audit sampling for substantive tests
• probability-proportional-to-size (dollar-unit) sampling
• judgment sampling techniques

7. Analytical Procedures and Accounting Estimates

• analytical procedure methodology
• expectation sources
• analytical procedure pitfalls
• accounting estimates
• financial ration analysis
• selected analytical procedures for the audit cycles

8. Introduction to Internal Control and Integrated Framework

• types of internal controls
• SAS Nos. 55 and 78: Consideration of Internal Control in a Financial Statement Audit
• management assertions and the internal control structure
• basic elements, definitions, and goals of the Integrated Framework matrix
• evaluation tools
• reporting on internal control
• benefits and criticism of the Integrated Framework

9. Specific Internal Control Auditing Issues

• consideration of internal control in a financial statement audit
• techniques to obtain and document an understanding of the internal control structure
• attributes testing workpapers
• process flow, separation of duties and key documents for the six audit cycles
• internal control objectives and control tests for the six audit cycles
• computer control activities
• financial auditing internal control questionnaire (ICQ)

10. The Risk of Fraud in Financial Reporting

• fraudulent financial reporting
• the current business environment and fraudulent financial reporting
• the COSO Report: Fraudulent Financial Reporting, 1987-1997 – An Analysis of U.S. Public Companies
• fraud awareness
• SAS No. 99: Consideration of Fraud in a Financial Statement Audit
• SAS No. 54: Illegal Acts
• a fraud audit approach
• accounting gimmicks
• SEC and fraudulent financial reporting
• where to look for fraud in the six auditing cycles
• fraud prevention
• audit case: MiniScribe, Inc., Fort Collins, Colorado

11. Substantive Tests for the Revenue Cycle

• definition of substantive tests
• auditing the income statement account in conjunction with the balance sheet accounts
• relationship of the management assertions, audit objectives and audit actions (procedures)
• revenue recognition
• FASB Concept Statement No. 5: Recognition and Measurement in Financial Statements
• SEC Staff Accounting Bulletin (SAB) No. 101: Revenue Recognition in Financial Statements
• revenue Recognition accounting gimmicks
• potential misstatements for sales and cash receipts
• specific substantive tests for sales, accounts receivable, cash receipts, and cash
• selected revenue cycle disclosures

12. Substantive Tests for the Acquisition Cycle

• potential misstatements for purchases
• specific substantive tests for accounts payable, accrued expenses, and cash disbursements
• acquisition cycle disclosures
• purchase commitments and contingent liabilities
• transactions that keep expenses and debt off the books

13. Substantive Tests for the Payroll Cycle

• payroll cycle potential misstatements
• specific substantive tests for the payroll cycle
• payroll cycle disclosure

14. Substantive Tests for the Conversion Cycle

• specific significance of inventory audits
• significant risks and issues for inventory
• inventory and costs of goods sold audit objectives
• potential misstatements for the conversion cycle
• inventory cost flow assumptions
• observing physical inventory
• specific substantive tests for raw materials, work-in-process, and finished goods inventories
• conversion cycle disclosure

15 Substantive Tests for the Financing Cycle

• auditing long-term debt and stockholders’ equity
• internal control over long-term debt and stockholders’ equity
• specific substantive tests for long-term debt and stockholders’ equity
• long-term debt and stockholders’ equity disclosures
• auditing retained earnings

16. Substantive Tests for the Investment Cycle

• accounting for marketable securities and derivatives
• internal control over investments
• potential misstatements for marketable securities
• specific substantive tests for marketable securities
• auditing prepaid and intangible assets and natural resources
• accounting and internal control for property, plant, and equipment
• potential misstatements for property, plant, and equipment
• property, plant, and equipment disclosures

17. Important Financial Auditing Resources

• text reference for financial auditing and accounting research
• Web site addresses for financial auditing and accounting research
• Web site addresses for benchmarking internal audit department standards and professional practices
• Web site addresses for developing audit programs

18. The Sarbanes-Oxley Act of 2002

CPEs: 22

Sponsor Background:

Quote From Past Participants:

Past Participants Include:

• Reynolds & Reynolds
• U.S. Department of Revenue
• NY City Board of Education
• University of Kentucky
• Sundstrand
• GPU Service Corporation
• First Tennessee Bank
• Crum & Forster
• Banco Popular de Puerto Rico
• Carrier
• Union Camp
• New Jersey Highway Authority
• Georgia Pacific
• E.I. DuPont
• Pacific Bell
• The Torrington Co.
• Volvo
• Dayton Hudson Department Stores
• Goodyear Tire & Rubber
• National Liberty
• Scott & White Memorial Hospital
• Tenneco
• Public Service Co. of Colorado
• First Interstate Bank of Oklahoma
• Signet Bank
• Warner Lambert
• City of Orlando
• Monsanto
• Towers Department Stores
• RJR Nabisco
• Shell Oil
• Tektronix
• Stroh Brewery Co.
• University of Minnesota

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