Page 17 - Demo

جميع الحقوق محفوظة ـ اإلعتداء عىل حق املؤلف 17 بالنسخ أو الطباعة يعرض فاعله للمسائلة القانونيةa- What would be the level of planned detection risk (DR) needed to achieve the acceptable audit risk (AR) of 5 percent? b- Let us reduce the control risk (CR) value to 40 percent and recalculate DR. Notice that to achieve an acceptable level of audit risk in the first example. the auditor must set planned detection risk lower (20 percent) than in the second example (31 per- cent). This is because the internal control structure in the first example is riskier (60 percent) than it is in the second case (40 percent). To achieve the planned detection of 20 percent in the first example, the auditor will need to perform more substantive tests than in the second example, where the detections risk is lower while control risk is higher. PHASE 3: Fieldwork and implementing the auditing procedures (4 steps)1) Step 1: Test of controlsTest of controls are audit procedures performed by auditors to evaluate the effectiveness of the controls applied. EX: assume a client’s internal controls require matching of all relevant terms on the customer sales order, shipping document, and sales invoice before transmitting sales invoices to customers. This control is directly related to the occurrence and accuracy transaction-related audit objectives for sales. The auditor might test the effectiveness of this control by comparing a sample of sales invoices to related shipping documents and customer sales orders.