Sufficient Accounting Procedures, Research Paper Example

The aspect of sufficient accounting procedures implies that the assessment of the qualities of some of the estimates is unsure with regards to things that might happen in the future. Another reason for sufficient accounting evidence is when the pertinent information can’t be accessed in a scheduled, cost avoidant manner. The accounting evaluations in the statement measure the effect of the business transactions which have happened or the condition of a liability or an asset (AU 342.01 2057). Examples of the accounting assessments incorporate the measured inventory value, the quantities of assets which are  outstanding in accounts receivables, assets and disaster insurance, deficit reserves from agreements which had been measured by the amount completed and the expenses from retirement plans (AU 342.01 2057).

The administration has the responsibility of providing the accounting evaluation procedures which are incorporated in the financial statements. The valuations are founded on objective and subjective characteristics. Prudence is needed to approximate a period of the time when the financial statements are issued. The administrative judgment is conventionally founded on the assumptions on situations that are anticipated which include the appropriate reactions (AU Section 342.02 2057).

The indexes that demonstrate which levels that material misstatement are pertinent are the significant procedures by which  audit processes  are made in order to find material misstatements at the confirmation levels. These processes are composed of the examinations of details which include the categories of transactions, account amounts, revelations and the significant process of review. The examinations of controls are audit processes which are planned for measuring the actual effectiveness of the administrative controls in deterring, finding and repairing the material misstatements at the confirmation phase (AU –C 330.4 318).

In putting together an audit strategy or a plan, a well formulated insider audit charter is needed. The audit charter will guide the organization in the context of the responsibilities for executing, planning, conceiving, and the required amounts of protection and scheduling. The function of the inside auditor is to assure the responsibility for putting together and carrying out responsibilities of being accountable to the audit committee. The effective audit plan should be composed of the following elements:

• Records of the procedures that are being checked with attention to the transaction flow and the procedural risks.
• Measuring the success of the control design.
• Finding the operating success of the results.
• Provision of the precise repair plans.
• The formulation of the audit report (Scofield 1).

The auditor should decide if the foundation of the audit work has one or two deficits in its internal administration (AU 265.08 222). In the circumstance that the auditor finds deficits in the internal administration of the audit work, the auditor should measure each of the deficits in order to find out on the merits of the audit, whether it was conducted by an individual or a group  and if the deficits compose material shortcomings (AU 265.09 223). If the auditor finds a deficit or a mixture of deficits not being the result of a material shortcoming, the auditor should decide if the prudent administrators who would be privy to the same knowledge would come to the same conclusion (AU 265.09 223). These are the characteristics of the auditor’s responsibility with regards to communicating any of the internal control deficits to the individuals or entities which have the responsibility of organizational governance (AU 342.01 2057).

Works Cited

AU Section 342.”Auditing accounting estimates.” SAS No. 57, SAS No.113, 1 January    1989.Web. 25 February 2014 http://www.aicpa.org/research/standards/audittest/downloadsabledocument

AU Section 265.”Communicationg internal audit related matters identified in an audit.” SAS No. 122, SAS No. 125, 15 December 2012.Web. 25 February 2014 http://www.aicpa.org/research/standards/audittest/downlaodabledocument

AU- C Section 330. “Performing audit procedures in response to assessment risks and e evaluating the audit evidence obtained.” SAS, No. 122, 15 December 2012.Web. 25 February 2014            http://www.aicpa.org/research/standards/audittests/downloadabledocument

Scofield, Laura & Eric Martinez. “How well does your firm’s risk management process stack up?”AICPA, 4 November 2010. Web 24 February 2014 http://www.aicpa.org/publication/newsletters/corpfinsider/2010/nov4