When Determining Sufficient and Appropriate Audit Evidence in Order to Form

question 137

Essay

When determining sufficient and appropriate audit evidence in order to form an opinion on the client's financial statements the auditor compiles audit documentation to support the opinion. The largest portion of audit documentation will include detailed supporting schedules prepared by the client or the auditor in support of specific accounts on the financial statements. Two types of supporting schedules are analysis and reconciliation of amounts. Discuss those two schedules and give an example for each schedule.

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Definitions:

Presentation Of Activities

Presentation of activities typically refers to the manner in which a company's or organization's actions and functions are organized, documented, and reported.

Operating

Pertaining to the day-to-day functioning and management of a business or enterprise, often related to producing or offering goods and services.

Cash Flow

The total amount of money being transferred into and out of a business, affecting the company's liquidity.

Balance Sheet

A balance sheet is a financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, giving a snapshot of its financial condition.